Forget the art of the deal. U.S. President Donald Trump has become the master of the non-deal.
Nearly a year and a half into his administration, Mr. Trump has demonstrated a knack for threatening trade wars, shredding some agreements and forcing open others.
But he’s made scant progress toward his goal of permanently rewriting the rules of global trade in favour of the United States.
He has pulled the U.S. out of the Trans-Pacific Partnership trade deal, dragged Canada and Mexico into an unwanted renegotiation of the North American Free Trade Agreement and threatened much of the rest of the world with various sanctions.
Mr. Trump has thrown the world into a vortex of uncertainty. But even he doesn’t seem to know where it’s all headed. There is no apparent endgame to the U.S.-induced trade turmoil.
Mr. Trump’s new go-to line on such matters is: “We’ll see what happens.” His verbal shrug-of-the-shoulders applies to the U.S. trade showdown with China, recently imposed U.S. tariffs on steel and aluminum imports, the possibility of the U.S. getting back into the TPP and whether there will be a NAFTA deal.
What the Trump administration wants from NAFTA is also in flux now that talks have reached an apparent impasse. Canada, the United States and Mexico are far from agreement on most of the controversial demands put on the table by the Trump administration, including an end to independent settlements of disputes, restricting access to the U.S. government purchasing market, an end to Canada’s protected dairy, poultry and egg sectors, plus a five-year sunset clause on any new NAFTA deal.
U.S. Treasury Secretary Steve Mnuchin suggested this week that the U.S. might be open to the idea of a “skinny” NAFTA deal, centred around new minimum North American content requirements for vehicles built in the three countries.
A more likely scenario is that the current negotiations drag on into next year, or beyond looming elections in Mexico and the U.S.
Mr. Trump’s oft-repeated threat to pull the U.S. out of NAFTA seems to be off the table for now.
Also put on hold this week was the threatened trade war with China. The U.S. has suspended its threats to impose billions of dollars in duties on Chinese goods, apparently getting virtually nothing in return beyond vague promises to buy more U.S. goods.
Mr. Trump’s 1987 book, The Art of the Deal, seems prescient when you look at the U.S. administration’s shifting trade stance. Flexibility, he wrote, is key to striking a deal. Who knew?
“I never get too attached to one deal or one approach,” Mr. Trump wrote. “For starters, I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first.”
Mr. Trump may also be learning the hard way that the rest of the world isn’t willing to just roll over in the face of his unilateral “America First” mantra. Agreeing to major trade concessions would be buying into Mr. Trump’s ludicrous notion that the large U.S. trade deficit is a measure of how other countries are taking advantage of the United States.
Canadian Foreign Affairs Minister Chrystia Freeland has said she’s ready to agree to a “win win win” outcome of the NAFTA negotiations. Unsaid, of course, is that Canada will never accept a win-lose-lose deal.
The same goes for China, the European Union and the rest of the trading world. Most countries can be bullied to the negotiating table with trade threats. But that’s not the same as submitting to punishment for misdeeds they haven’t committed.
The Art of the Deal also offers some insight into Mr. Trump’s style when it comes to threats and bluster.
“You can’t con people, at least not for long,” he wrote in one remarkably lucid passage. “You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don’t deliver the goods, people will eventually catch on.”
America’s trading partners, it seems, are catching on to the way Mr. Trump plays the negotiating game. And they’re calling his bluff.