Unmaking of a Pretend Deal Maker: Art of the Failed Bluff

-edited

Trump backed down from a border closure threat. And he approved a trade deal with Canada and Mexico that's on the rocks.

Trump's NAFTA replacement, USMCA Deal 'In Trouble', Bruised by Elections, Tariff Rows

More than six months after the United States, Mexico and Canada agreed a new deal to govern more than $1 trillion in regional trade, the chances of the countries ratifying the pact this year are receding.

The three countries struck the United States-Mexico-Canada agreement (USMCA) on Sept. 30, ending a year of difficult negotiations after U.S. President Donald Trump demanded the preceding trade pact be renegotiated or scrapped. The United States has its next presidential contest in 2020, and Canada holds a federal election in October.

“The USMCA is in trouble,” said Andres Rozental, a former Mexican deputy foreign minister for North America.

Canada’s Parliament must also ratify the treaty and officials say the timetable is very tight. Current legislators only have a few weeks work left before the start of the summer recess in June, and members of the new Parliament would have little chance to address ratification until 2020.

Trump, a Republican, has shown frustration with the Democratic-led U.S. House of Representatives for failing to sign off on the USMCA. He has threatened to pull out of the old pact, the North American Free Trade Agreement (NAFTA), if Congress does not hurry up.

Trump on Thursday threatened to slap tariffs on Mexican auto exports unless Mexico does more to stop drug traffickers and illegal immigration.

In Ottawa, Canadian Foreign Minister Chrystia Freeland said this week her government was “constantly” looking at its own retaliation list, noting that Trump’s tariffs left the country over C$16 billion worth of space to strike back.

Prime Minister Justin Trudeau, who faces a tough re-election battle, on Thursday rejected accepting quotas on Canadian steel and aluminum in exchange for U.S. tariffs being dropped.

Trudeau was criticized during the USMCA negotiations for giving ground to Trump on access to Canada’s dairy sector.

USMCA Little Different From NAFTA

An amazing amount of bickering is taking place over what is essentially the same deal. Canada is correct to be annoyed over Trump's tactics.

Mexico no doubt will not be happy with Trump's threats on auto parts. The US auto makers will not be pleased either.

Trump Backs Off Closure Threat

Trump Backs Down As Expected

Trump backed down from threats to close the border with Mexico as expected in this corner. We would have had chaos over auto parts, medical supplies, and food had he not done so.

Yet, Trump again threatens slap tariffs on Mexican auto exports unless Mexico does more to stop drug traffickers and illegal immigration. He won't, else he risks USMCA.

China Trade Deal

The trade deal with China keeps getting extended and extended. I expect a signing, but as with USMCA there won't be much in it.

Art of the Fail

In January of 2018, Democrats offered Trump $20 billion to build a wall in return for and amnesty deal. It would have solved two issues. Trump turned down that offer which he would gladly take today.

Trump promised a better NAFTA. Instead we are bickering over what is essentially the same deal. In one aspect USMCA is worse than NAFTA because it puts US companies at the mercy of a corrupt Mexican court system.

Eventually I expect USMCA and a trade deal with China to pass, but the former is essentially the same and the latter will just return to China to buying more soybeans and Boeing aircraft.

Unmaking of a Pretend Deal Maker

At this point, the whole world knows Trump is an awful negotiator. Even worse, he negotiates in a predictable pattern: scream, bluff and ask for the moon, then cave and plead for a deal at any price.

The press and the Democrats are so busy speculating on the latest legal actions and Russia nonsense that they ignore this far bigger story story sitting right in front of them.

Mike "Mish" Shedlock

Comments (22)
No. 1-13
Stuki
Stuki

".....Trump is an awful negotiator."

He's not any more awful than anyone else. The outcome of any negotiation over any issue of any real importance, is determined, conclusively, by facts on the ground. Not by what some privileged twit babbles or tweets about.

"Great Dealmakers" only exist in cheesy TV shows, and in the childish minds of those dumb enough to believe those represent reality.

It can work only for as long as the final "deal" has to be made in a closed room. Without each negotiating partner having the opportunity to step outside, and have tentative agreements combed over by specialist advisors. As soon as the specialists step in, the ones from both sides will be informed enough about the facts on the ground, that the outcome is derivable directly from those. No "dealmaker" required.

Progressives, ambulance chasers and others too incompetent to, in any meaningful way, alter hard facts on the ground; have every incentive to keep pretending that the only thing they can "contribute," mindless babble about all the things others must do, is somehow what determines outcomes. It isn't. Never has been, never will be. The Japanese didn't surrender because the Allies suddenly become better "negotiators." Nor the Japenese worse ones. But simply because productive people in the West had produced a bomb bigger than anything the Japanese could hope to cope with.

abend237-04
abend237-04

At the core of every "trade deal" lies two lies: 1.We, your leader(s), can protect you from competition and, 2. The protection we provide will raise your living standard.

Trade deals are a symptom of ignorance and gullibility, the natural hunting ground of politicians of every stripe.

What politician could be elected anywhere with a campaign promise of: I can't protect you from foreign competition in a Flat Earth economy. Our only path forward to a prosperous future is to educate, innovate and work our asses off.

lol
lol

Can't blame them ,why the hell would you sign off on the exact same treatyyou had before simply so Trump can claim credit for this farce!

AWC
AWC

Only omnipotent government apparatchiks can decide who should trade what, and with, whom. Grant these anointed ones fuller consensus, and see what you get.

2banana
2banana
  1. The deal isn't over until the deal is agreed to. Negations are messy, full of ego, full of bluffs and give/takes. Some take years or decades (for example - reference the SALT treaties - first discussed in 1967 and not full ratified until 1979).

  2. I will take ANY of these non-deals over the Paris Accords, NAFTA, the Iranian Agreement or the Trans-Pacific Partnership (TPP). All disasters for the United States and the working man. Some deals are much worse than what you had before.

  3. Why do want to cave so quickly for such a bad deals? It is, as if, just getting a "deal" is an ends to a mean.

Realist
Realist

Trump is the worst US President ever. He may claim to want to MAGA, but the reality is he just wants to be the centre of attention. I completely agree with Mish that any trade deals he actually manages to complete will be essentially status quo. Though he will claim that they are the ”greatest deals ever made”.

Tengen
Tengen

Trump talks too much and changes his mind far too much. Why even try to strike a meaningful deal with him?

Besides, there's only so much pressure he can apply to countries with the threat of sanctions or an increasingly impotent US MIC. If he applies sanctions, either wait him out or find a way to make any segment of the US cry out in pain. If they do, Trump will usually reverse course.

The weakness of the MIC has been laid bare by Syria. I bet when Bashar al-Assad was studying to be an optometrist he couldn't have imagined he would one day become the model for standing up to the US military. Who knew there would be consequences to viewing wars as eternal cash cows, rather than trying to win them?

It also doesn't help that many of our NATO allies are facing serious internal pressures resulting from their own cupidity and incompetence. We're not exactly the united bloc we used to be.

Sechel
Sechel

after two years, its clear trump backs down a lot. he has one tactic brinkmanship and its clear he's often bluffing

ReadyKilowatt
ReadyKilowatt

Why have any trade "deal" at all? Just allow individuals to trade with whomever they wish. Same thing with the EU and Brexit. If some overseas industry is "dumping" product on our market, great. The old saying "We lose money on every sale, but make it up in volume" applies to China every bit as much as it did to pets.com. Let them blow though capital until they can't. Then perhaps more thoughtful people will get their chance. Especially for nation-states, who should be in the long game anyway.

Liberaldisdain
Liberaldisdain

Wrong about the election, wrong about the recession, wrong about almost everything Trump and you'll be eating crow in 2020. MAGA.

Zardoz
Zardoz

Art of the squeal. Nobody takes that pig seriously.

Casual_Observer
Casual_Observer

Based on his history of negotiating bad deals and then taking companies into bankruptcy and getting lenders to bail him out, Trump fits quite nicely into this era of 22T of debt and rising. Expect the unexpected now that people are resigning again.