You can argue about what exactly was the most incredible news out of the White House this week: The possible use of the American military in Syria, the raiding of the President’s private attorney by the FBI, Trump’s “slime ball” comeback at the memoir of the scorned former FBI director – all would be contenders.
But the development that carries the most weight is the news that Trump may now want to rejoin the Trans-Pacific Partnership or TPP.
It shows what’s wrong about the President’s decision-making – its impetuousness and lack of coherent strategy.
He made a big show of pulling out of the TPP. Then he tangled with China.
Now he might want back in.
It’s something to think about as Trump tries to renegotiate NAFTA and as he moves to withdraw the US from the Paris climate agreement.
TPP is the massive proposed trade deal between the US and 11 other Pacific nations that was negotiated by the Obama administration and on the brink of passage with help from Republicans in Congress when Trump was elected. TPP, which was like a massive NAFTA, was specifically structured by the US and these nations to create a counterweight to China’s power and economy.
That was the whole idea. It was achieved by eliminating tariffs between the TPP countries. Getting rid of it created a huge opportunity for China.
Trump had called the TPP a horrible deal and a “rape” of the US, and one of his earliest acts as President was to officially blow the thing up, promising better deals for the American worker.
But that was before he taunted China with a trade war, starting the process of slapping more than $150 billion in tariffs on numerous sectors of the massive Asian economy. China responded in kind, announcing its own tariffs on US goods, with a focus on farming. That could hurt Trump where it counts – affecting the income of farmers in the states that delivered the White House to him over Hillary Clinton.
Ahem. The farming industry was one that stood to gain most from the TPP, as negotiated by the Obama administration.
An outcry from the nation’s breadbasket about the looming Chinese tariffs might have something to do with Trump’s dispatching his trade representative and economic adviser to see if maybe a new TPP could be renegotiated, albeit with better terms than Obama had gotten.
The problem, as CNN Money wrote this week, is that the rest of those nations didn’t just decide to slink home without a trade deal after the US pulled out. The other 11 of them forged ahead and started their own negotiations for a trade deal without the US and without China. They’re coming along nicely. And they bristled Friday when it was suggested that maybe the US could just slide back into the deal.
And this is the problem for Trump, who does not seem to be a very good player of global chess.
He had spent the 2016 campaign railing against both China and the TPP and not realizing that one had everything to do with the other. He couldn’t see a few moves ahead to realize that his belligerence toward China could have consequences the TPP was created to address.
In Trump’s mind, he is always going to be the one to deliver a better deal. But in this case, he has let loose on China, perhaps in an effort to extract trade concessions from them. But he had already handed away a very big piece of leverage without getting anything in return.
Sure, it is possible that Trump’s game of tariff chicken with China could yield a remarkable and mutually beneficial deal. Or, it’s possible the 11 nations that struck out on their own TPP could ultimately let the US negotiate its way back in. It’s also possible the US could get individual trade deals with all 11.
And it’s also not to say the TPP, as it was negotiated, would have been a panacea. There were plenty of smart people arguing it was a bad deal. Here’s Nobel prize-winning economist Joseph Stiglitz writing that it would exacerbate inequality in the US and make it easier for companies to offshore jobs. Plenty of Democrats, including Bernie Sanders and Hillary Clinton turned against it during the 2016 campaign, too. So Trump wasn’t exactly alone. But he carried through on his promise to destroy the deal.
But this week if feels very much like Trump is looking for a way to ease the pain his China rhetoric will cause in the states that like him most. But that way will require him to do a massive turnaround on a completely different campaign promise.