No. of Recommendations: 11
I mean, it's no great insight that one of Trump's signature moves is to obtain a trivial, illusory, or unenforceable outcome in one of his "deals" and declare it the greatest victory. So it's not much of an insight to note that's one of the possible, if not likely, outcomes of his tariff morass. But it's interesting to see some groundwork being laid out, here by Mark Thiessen (the more "conservative" of the
WaPo opinion writers):
A few weeks later, [then-President Trump] made the same offer to the European Union. “The European Union is coming to Washington tomorrow to negotiate a deal on Trade,” Trump tweeted, “I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies!”
None of our major trading partners showed any interest in Trump’s proposal.
Fast forward seven years, and the E.U. is suddenly offering to negotiate “zero-for-zero tariffs for industrial goods,” as European Commission President Ursula von der Leyen put it last week. That sounded very much like the deal he offered them in his first term.https://archive.ph/Qh1MR#selection-417.0-1219.190Except, of course, it is very much
not like the deal he offered them in his first term. There's a good reason why the EU would not accept a deal that dropped "all Tariffs, Barriers and Subsidies." The EU's primary trade restrictions deal with protecting their domestic agricultural sector, which (like in the United States) packs a huge amount of political punch. Plus, the Trump Administration has claimed that the backbone of their taxation system, the VAT, is itself a trade barrier - so they're not going to rework their entire economic system just to gain some extra access to the U.S. market.
So what's on offer is actually
far far different from what Trump wanted. In fact, it's probably a pretty sweet deal for the EU, since their tariff rate on industrial goods from the U.S. is exceedingly low already (they only have a tariff rate of about 1% on all imports on average, which is almost all ag tariffs) - and they'd love to get tariff-free access for their automobile industry. But that type of deal is one that Trump's supporters can spin as a win, even if it has very little actual benefit (or even a slight detriment) to the U.S.
I don't doubt that the Administration will try to get much more, but given that they've already shown how easily they can get blown off a hand by even the slightest hiccup in the bond market, that's just so much weakness that it's hard to see how they can do well in these discussions. Trump hasn't done any of the work necessary to make domestic voters (outside of pure MAGA) comfortable with the long-term plan, so he can't handle the political pain. The downside to the "madman" theory of negotiation is that you can't assure your voters (or your Congressbeings) that you're not a madman - which gives your counterparties a lot of leverage over you.
That's why we're already seeing groundwork for "declare victory and go home" as an exit strategy.
