The Denver Post

Can Trump’s style bring more breakthrou­ghs?

- By Paul Wiseman

WASHINGTON» The Trump administra­tion has muscled Canada into joining a revamped North American trade deal, sealed a pact with South Korea and coaxed a reluctant Japan into agreeing to oneonone trade negotiatio­ns. All in the past two weeks. To President Donald Trump and his allies, the results vindicate his drive to upend traditiona­l trade policy and deploy import taxes — real and threatened — as a cudgel to bully concession­s out of America’s trading partners.

“Without tariffs,” Trump declared Monday after his team announced that Canada had followed Mexico in agreeing to a revamped North American deal, “we wouldn’t be standing here.”

Some likeminded business groups agree that Trump’s inyourface style, a far more confrontat­ional stance than his predecesso­rs deployed, deserves credit.

“Aggressive unilateral action is making deals more possible,” said Michael Stumo, CEO of the Coalition for a Prosperous America, which supports a combative U.S. trade policy.

Negotiatin­g without a credible threat of trade sanctions, Stumo argued, “leaves no incentive for other countries to agree to anything new.”

Critics, though, contend that Trump’s apparent breakthrou­ghs appear much more impressive than they actually are. What’s more, they say, the backlash the administra­tion could face in the future from formerly friendly trade partners could diminish whatever gains have been achieved.

“You set a bunch of fires ... you put them out and you call yourself a hero,” said Philip Levy, senior fellow at the Chicago Council on Global Affairs and a White House economist under President George W. Bush.

The critics say the recent trade deals have produced few concrete gains and offer scant reason for optimism about the administra­tion’s riskiest gamble of all: the trade war it’s ignited with China, the world’s secondbigg­est economy after the United States.

Trump entered office vowing to reduce America’s gaping trade deficit — $553 billion last year — with the rest of the world by tearing up trade agreements and confrontin­g abusive practices by China and other countries. In March, he began imposing taxes on

steel and aluminum imports. Four months later, he threatened to target foreign autos and auto parts — imports that amounted to $340 billion last year.

Trump justified the moves by arguing that the imports posed a threat to U.S. national security. Many trade analysts dismissed that rationale as prepostero­us. Most of the targeted imports, after all, come from U.S. allies — Canada, the European Union and Japan.

Whatever the legitimacy of his tariffs, by imposing and threatenin­g them on national security grounds, Trump created leverage for himself. He upped the ante by threatenin­g to abandon a regional pact with Canada and Mexico — and thereby imperil supply chains that crisscross borders — unless he could get what he considered an acceptable rewrite of the North American Free Trade Agreement.

America’s trading partners began to buckle under the pressure.

To avoid the steel and aluminum tariffs, South Korea agreed to a rewrite of a 2012 trade deal with the U.S. Under the revamped version, Seoul submitted to quotas on its steel and aluminum exports to the U.S. and modestly opened South Korea’s auto market to U.S. automakers, among other things.

Japan managed to halt the threat of U.S. auto tariffs by reluctantl­y agreeing last month to bilateral trade talks with the United States. Tokyo had resisted Trump’s entreaties, preferring a broader trade pact.

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