While some of President Trumps loyalists and supporters (himself included) consider him a tough negotiator, it often seems he is playing one game of “pin the donkey’s tail”- blindfolded. Diplomacy was never his strong suit so canceling a scheduled summit with North Korean Kim Jong Un, what could have been a historic peace deal and exiting the Iran nuclear deal set to have detrimental repercussions come off close to his brand. But the fact that there is no calculated strategy for the two threats he deems toxic for American prosperity: imports and immigrants, is rather flustering. Is acting on impulses the new normal for the Trump regime?
It would certainly seem so because the world of “America First” increasingly assigns little value to having a game plan. Following on his long-running promise to protect local steel and metal manufacturing industries, Trump levied tariffs on steel and aluminum that aggravated many of the country’s close allies including the EU. While the bloc attained a temporary exemption from this levy until the matter is revisited on June 1, it is clear Trump plans to use this to reduce the trade deficit America has with the EU. The EU is also on the chopping block on auto imports which Trump believes have been hurting US domestic automotive industry. EU to its part has promised to fight back.
On the other end is a brewing of another trade war where Trump could use EU’s help- China. Since before he came into power, Trump blames China for the loss in American manufacturing jobs, describing the county as an “economic aggressor”. In fact, the latest ill-advised steel and aluminum tariffs were also targeted at China though China is not even the biggest exporter of steel to the US; Canada is. However, China has earned the ire of many other countries including the EU when it came to steel dumping.
It is believed in Washington circles that China has been building a technological and industrial empire by stealing US intellectual property. Analysts have argued that companies that shifted to China were required to transfer technology to Chinese firms as a pre-condition to market entry or enter into joint ventures with the Chinese firms to gain access into certain markets.
Trump believes tariffs are the way to rein China in and presented a package with a host of tariffs and restrictions on Chinese goods. Apart from the fact that China could come back with its own set of retaliatory tariffs, analysts argue that it is much more problematic. Since majority of Chinese exports to the US are part of supply chains serving many American tech and automotive companies making American goods for American consumers, it is the American consumer that will get hit first.
The package was temporarily put aside after the Chinese government negotiated a deal where China will lower barriers for great market access for US goods. This was diametrically opposed to Trump’s earlier contention of reducing Chinese imports and the tentative deal faced a huge backlash from both sides of political divide. However, they shouldn’t worry too much since Trump is already reverting back to his earlier position
.
As much as he oscillates between one decision to the next, it is clear the Trump administration goes by the ear on almost all matters of policies. Analysts believe if he is serious about closing the trade gap with China, hitting china with tariffs would not be effective. In fact, President Trump should seek cooperation from the EU. The EU can put pressure on China on steel and other dumping practices while a case can be made with the WTO on the violations of American intellectual property rights by China where EU’s support would carry weight. But for this, Trump will have to exempt EU from steel tariffs and put other tariff proposals against EU on the backburner.
If he aggravates both EU and China, it would result in retaliations that would hurt the American consumer and American companies first. If President Trump can’t pick a side, he must pick an enemy. But in this post-strategy America, perhaps that may to be too much to ask.