Trump’s car vs. cheese ultimatum
When Theodore Roosevelt called the U.S. presidency a “bully pulpit” he was using “bully” in its now archaic sense of “excellent” or “smashing.” A pulpit, of course, is a place you deliver sermons from. Now when we hear the term “bully pulpit” we think of it as meaning a pulpit for a bully, with bully meaning, as Merriam-Webster defines it, “a blustering, browbeating person; especially: one who is habitually cruel, insulting, or threatening to others who are weaker, smaller, or in some way vulnerable.”
This modern understanding of “bully pulpit” was never more apt than during President Trump’s announcement Monday that Mexico and the U.S. had come to an agreement over what they will probably call the U.S.-Mexico Free Trade Agreement, canning the term “NAFTA” because of its bad connotations for Americans whom it had allegedly ripped off. Like a bully, the president barely concealed his annoyance when at first he couldn’t get the phone link with Mexico’s president to work. Then he couldn’t conceal his boredom when President Peña Nieto and his translator went on a little too long or his bemusement when his counterpart continued to use the term “NAFTA,” which he himself had just effectively declared prohibido. He was also literally fulsome in his praise for the Mexican president and his negotiating team — because they’ve done what he demanded — and told them Mexico was very proud of them. Whether their careers survive this endorsement remains to be seen.
Mr. Trump also mused, in the spectacularly uninformed way of someone unaccustomed to contradiction, how the new deal might well be the biggest ever, even if a nanosecond’s thought says that NAFTA, which already exists and includes the U.S., Mexico and a third country (us, Canada!) has to be bigger than any U.S.-Mexico deal. As logic puzzles goes, that one’s not exactly a Rubik’s Cube.
Of course, Mr. Trump is not currently thinking of us in any very inclusive way. Here was where his bullying came out most clearly. On first reference, he didn’t actually say the name of our prime minister. On second reference, he did. But only to indicate that we now face a simple trade choice, either a “deal” consisting of a new U.S. tariff on cars, or a more comprehensive agreement in which we give up all our horribly unfair policies toward the Americans, including the only one I suspect the president is truly aware of, our almost 300-per-cent tariffs on dairy imports. Line one in the handbook of bullies is make offers people can’t refuse. “What’ll it be, cheese or cars?” is a choice we would dearly love to avoid. But we are, as Merriam-Webster says, “weaker, smaller, … in some way vulnerable.” In trade, perched atop the northern border of the American colossus, we are in almost every way vulnerable.
The only hopeful aspect of Monday’s Oval Office performance was that one word was dramatically conspicuous for its absence: “Wall.” If you had asked for word associations during the 2016 presidential campaign, pairing “Trump” and “Mexico” almost certainly would have generated “wall.” But the wall was nowhere to be heard of Monday — although in diplomacy worthy of Barack Obama, Mr. Trump did thank the Mexican president for co-operation on “the border.”
The reason the White House is touting the signing of a new trade deal rather than a ribbon cutting for a new border wall is, of course, that Congress blocked the president’s wall. It’s not so much that Mexico has friends in Congress — although it does — but that Democrats and some Republicans don’t want to spend tens of billions of dollars on a project that is more political stunt than border securer.
On trade, by contrast, the president doesn’t need budget approval to get better terms from Canada, although he does eventually need Congressional approval for any legislation such terms might require. We, too, have friends in Congress — even if it’s only those who aren’t facing an election soon that would risk accusations of being better friends to Canada than to Americans hurt by our unfair barriers.
The question now is whether we can get a deal that still includes three-digit tariffs on dairy and other supply-managed products. I’m an economist, not a political strategist. But in an age in which political strategy comes down to analyzing the whims of one man’s mind, it’s not clear expertise is worth much. My bet is that unless we repair the one fact about our current trade policy the president does firmly grasp, we won’t get a deal.
Under the 1995 WTO deal that turned our quantity limits on dairy imports into sky-high tariffs, the idea was we would gradually bring them down. Let’s get on with it. If Chrystia Freeland can’t get it done, maybe we could let Maxime Bernier have a go.
THE QUESTION NOW IS WHETHER WE CAN GET A DEAL THAT STILL INCLUDES THREE-DIGIT TARIFFS ON DAIRY.