Perspective: Trump declares victory too early; this time on trade
Donald Trump has always known that if you can’t make a deal, or the deal isn’t proceeding quite as fast as you’d like, the next best thing is to hold a splashy event in which you proclaim not only that you have in fact made a deal but also that it’s the greatest deal the world has ever seen.
Which is what he did Monday, bringing reporters into the Oval Office to announce that the North American Free Trade Agreement is no more and it’s being replaced with something spectacular. Here’s what he said:
“This is a tremendous thing. This has to do, they used to call it NAFTA, we’re gonna call it the United States-Mexico trade agreement. We’ll get rid of the name NAFTA, has a bad connotation because the United States was hurt very badly by NAFTA for many years ...
“I will terminate the existing deal. When that happens I can’t quite tell you, it depends on what the timetable is with Congress, but I’ll be terminating the existing deal and going into this deal. We’ll start negotiating with Canada relatively soon.”
Is Trump actually going to terminate NAFTA? I’m guessing not, but it would be an enormously complicated thing to do and it would take some time to figure out what the effects of doing so would be.
But here’s the truth about what’s happening right now. The United States and Mexico did in fact resolve some disagreements they’ve had in negotiations over revising NAFTA, particularly in the area of auto manufacturing. The amount of a car’s value that would have to be produced in North America in order to be exempt from tariffs would be raised from 62.5 percent to 75 percent, more local materials would have to be used, and more of the manufacturing would have to be done by high-wage workers. One major demand the Trump administration made, that a revised NAFTA would sunset every five years, has been emphatically rejected by Mexico and Canada (and roundly criticized by businesses, which would find it much harder to plan for the long term).
So, what we have here is some genuine progress in one corner of complex negotiations on which there’s still a long way to go. For starters, Canada has not yet approved these changes. There are other areas where there are still disagreements to be ironed out. Furthermore, a revised NAFTA would have to be approved by Congress, which might not be easy.
The even bigger picture is that this is just one part of the overall trade situation. NAFTA has lots of critics, and there are many changes that could be made to it to make it work better for Americans. Trump wasn’t wrong about that, even though he never seemed able to specify exactly what his complaint with the agreement was.
But in even the most generous interpretation of what Trump announced Monday, some jobs in the auto and steel industries might be made somewhat more secure — a drop in the bucket compared to the entire American economy.
So why is Trump celebrating? Maybe it’s because he has had so little to celebrate lately. Or maybe it’s because this is how he does things: If you haven’t actually won a great victory yet, just pretend that some incremental step along the way is in fact the victory itself.
We’ve seen it before. You’ll remember that when the House passed a bill repealing the Affordable Care Act, Trump held a triumphal Rose Garden ceremony to celebrate, even though the bill faced tougher odds in the Senate, where it eventually died. After having a friendly meeting with North Korean dictator Kim Jong Un, Trump proclaimed that “There is no longer a Nuclear Threat from North Korea.” But the agreement the two leaders signed was all but meaningless; Kim agreed only to “work toward” denuclearization, and in the meantime the North Korean nuclear program continues on.
There’s a theory behind such events, one that comes from Trump’s time in business. He always knew that image could in fact be transformed into reality: If he convinced everyone that the Trump name was the embodiment of luxury and quality, it would mean greater demand for his condos or steaks or scam “university,” and that would mean greater success and profits. That often meant pretending that success had already been achieved before it actually had. If people believed the hype, the hype could become real.
Sometimes it worked, and sometimes it didn’t.
It’s entirely possible that at the end of all this we’ll end up with a version of NAFTA that serves Americans better than the current one. But despite what Trump says, victory is still a long ways off.