President Donald Trump credits one particular campaign promise with his election victory: Scrapping and rewriting the nation’s free trade deals.
“Probably one of the major reasons I’m here today — trade,” he said two months after taking office.
But nearly six months into his presidency — even as Trump’s administration speeds into new talks with Canada, Mexico, China, South Korea, the United Kingdom and other countries — Trump is laying out a timeline that veteran trade negotiators say is impossibly ambitious.
Trump offered perhaps his most aggressive and optimistic trade talk yet at the Group of 20 meetings last week in Germany.
As he met with British Prime Minister Theresa May, Trump promised the two nations would strike a trade agreement “very, very quickly” and said it would be “a very, very big deal, very powerful deal, great for both countries.”
A quick pact with the United Kingdom appears impossible to carry out, though, for a multitude of reasons. Among them: The UK couldn’t begin negotiating until after its exit from the European Union is completed in 2019 — and even if it could, the United States wouldn’t know what to ask for, since such a trade deal would focus largely on addressing regulatory hurdles that won’t be clear until Brexit is concluded.
Then there are American legal requirements. Among them: The Trump administration must give Congress a 90-day heads up before starting negotiations. It also must provide 180 days of notice before signing a finalized trade agreement — and then another 105 days for the US International Trade Commission to produce its estimate of the economic benefits and costs of the proposed agreement.
Most trade agreements take at least 18 months to negotiate. In recent years, many have taken much longer.
“It’s a bit like three-dimensional chess,” said Thomas Bollyky, who negotiated one and a half of the 17 chapters of the US-South Korea trade deal in the office of the US Trade Representative and is now a senior fellow at the Council on Foreign Relations.
‘Wildly ambitious’
Trump’s trade promises are “wildly ambitious, and I think drawn fundamentally from a lack of personal experience in these topics,” Bollyky said.
At the outset, trade negotiators must solicit input from the House and Senate committees that oversee their work, as well as interest groups and activists.
Then, Bollyky said, comes the negotiations over the negotiations: hammering out with the other countries involved exactly what the deal will cover and what will be left out. The sides exchange white papers and then begin talks that are highly sensitive to political events for everyone involved — including each country’s election seasons, powerful lobbying forces and shifting political headwinds.
Even after the countries agree on a trade deal’s objectives, there remain hurdles in smoothing out sometimes vastly different regulatory systems and overcoming language barriers.
Trump made more major trade promises in recent days.
In a meeting with Indonesia’s president, Trump declared that “we’re going to be doing a lot of deals together — trade deals” — even though there would be no reason to negotiate multiple pacts with a single country.
He also said he had an “excellent meeting on trade” with Chinese President Xi Jinping and “will be able to do something that will be equitable and reciprocal” — ignoring the realities that the United States and China have battled over trade for decades, and Trump canceled the 12-nation Pacific Rim deal that was designed to give the United States additional leverage in the region.
Upon his return to the United States, Trump tweeted Sunday that he’d explained to foreign leaders at the G20 that “the U.S. must fix the many bad trade deals it has made.”
What Trump ignored: The United States only has trade deals in place with four of the other 19 countries represented in the G20.
As Trump made big promises, the European Union and Japan — both of which were until recently involved in trade talks with the United States — struck a massive trade deal of their own.
Japanese Prime Minister Shinzo Abe took a clear shot at Trump in announcing the deal.
“Japan and the EU demonstrated our strong political will to raise the flag of free trade high when there are moves toward protectionism in the world. It’s a result we should be proud of and this is a powerful message to the world,” he said.
Headway made
To be sure, Trump has made some headway on his tough trade stance.
In January, he pulled out of the Trans-Pacific Partnership, a trade deal that hadn’t yet gone into effect. That deal was already dead in practice — Hillary Clinton had also pledged to kill it, and it didn’t have enough support to win passage on Capitol Hill — but Trump still carried out his campaign promise.
And in the quieter ways more typical of international trade talks, Trump’s administration is in the earliest stages of negotiations that typically take years with several countries.
White House economic adviser Gary Cohn and the US trade representative’s office are leading a set of working groups with the United Kingdom. A trade and investment-focused working group will hold its first meeting in late July, focused on smoothing the Brexit process for businesses, an administration official said.
“A trade agreement cannot be reached or formally developed until the UK has left the EU, but there are a number of steps that can be taken in the process,” the official said.
Commerce Secretary Wilbur Ross and Treasury Secretary Steve Mnuchin are leading a comprehensive economic dialogue with China, with trade a major focus.
The President has also ordered US Trade Representative Robert Lighthizer to challenge other countries’ trade practices at the World Trade Organization. The administration official said Lighthizer’s office is currently in the process of developing those cases.
His administration has also navigated the sorts of routine disputes that flare up each year. It slapped a 20% tariff on Canadian lumber in April. Last month, Ross resolved a sugar dispute with Mexico.
Ross could also soon announce sweeping tariffs on steel imported from a range of nations, claiming it risks national security.
“My guess is that he will because he promised that he would,” White House chief of staff Reince Priebus said on “Fox News Sunday.”
And leaders from the US, Mexico and Canada will likely start to renegotiate their own trade pact, the North American Free Trade Agreement, in late August. The Trump administration is currently developing its list of negotiating objectives for a potential rewrite of the deal.
At last week’s G20 meeting, the official statement from leaders had a Trump-like tone baked into it, noting that trade must be “reciprocal and mutually advantageous.”
Trump also wants to finish NAFTA negotiations soon. But talks won’t start until late August and a new deal is already running out of time: Mexico has presidential elections next year and the front-runner, Andres Manuel Lopez Obrador, has threatened to be tough on trade with the United States.
Trump administration officials say they can renegotiate NAFTA before the end of the year. Trade experts disagree.
“Getting a deal done by early 2018 or the end of this year was wishful thinking,” says Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics. “It’s going to be a long negotiation.”
“I will say, on the fair side, he has some experienced people around him,” Bollyky said. “I cannot imagine those people are giving him the advice that this can be done quickly.”
And although Trump promises his trade deals will bring back jobs, he pares back those comments when pressed. Journalists at The Economist asked Trump in a May interview if he makes dramatic trade threats as a negotiating tactic but is actually willing to settle for small changes.
His response: “No, it’s not really, not a negotiation. It’s really not. No, will I settle for less than I go in with? Yes, I mean who wouldn’t?”
