THE MORNING PLUM:
President Trump thinks of international trade as a zero-sum game in which there are only “winners” and “losers.” He thinks we have been played for suckers for too long by countries that have been laughing at us, and his plan for large tariffs on steel and aluminum is designed to put an end to that once and for all.
So he may sign off on that plan as early as today. But Trump’s less-than-nuanced sense of himself as a “winner” also leads him to openly boast about the leverage he wields over his opponents — so much so that he frequently boasts of leverage he doesn’t actually have.
In the battle that will follow over Trump’s tariff plan, should he implement it, the second of these may end up undermining the first. Here’s why: Trump’s open boasting about using the tariffs as leverage over Canada and Mexico could actually weaken the administration’s legal case for them.
Trump has come under some pressure from people inside his administration to moderate his tariffs. And The Post reports this morning that Trump is likely to exempt Canada and Mexico, but only provisionally:
One version of the plan, which was still being finalized ahead of an expected announcement on Thursday, would give Canada and Mexico a 30-day exemption from the tariffs, the officials said. The exemptions could be extended based on progress in renegotiating the North American Free Trade Agreement.
It’s hard to know exactly what this will entail, but it clearly means dangling the threat of ending those exemptions for Canada and Mexico if the renegotiations of NAFTA don’t go to the Trump administration’s liking. Indeed, Trump himself had previously stated that he sees the threat of applying the tariffs to those two countries as a way to force concessions on NAFTA. This week, he tweeted:
Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.
But this stance could actually weaken the administration’s legal case for the tariffs, according to Robert Holleyman, deputy U.S. trade representative under President Barack Obama.
The administration is defending Trump’s unilateral action on the tariffs — which are opposed by most Republicans and Democrats in Congress — on national security grounds, invoking an obscure, rarely used legal provision to justify it both in terms of U.S. law and international trade rules.
But Trump has openly said that the tariffs are designed, at least in part, to exert pressure on Canada and Mexico in NAFTA talks, and other countries challenging the tariffs before the World Trade Organization could make use of this against the U.S. case.
“That statement hurts the fundamental defense that the U.S. will need to make in the World Trade Organization — that this is about national security,” Holleyman told me this morning.
All this has created a real mess of a situation that, ultimately, is all traceable back to the deeply disconcerting way that Trump makes decisions. What appears to have happened is this: Trump decided he wanted the tariffs, over the advice of many of his advisers and outside experts, to fulfill a campaign promise and because he wants to be able to look in the mirror and see a winner looking back. But the original rationale — national security — was complicated by the fact that it would also apply to Canada, a big supplier of steel to the United States which is also an important U.S. ally.
So the administration is now likely to temporarily exempt Canada and Mexico from the tariffs, after Defense Secretary Jim Mattis and Secretary of State Rex Tillerson argued that they risked damaging key alliances. And here’s where it gets really convoluted. If the administration were to permanently exempt Canada and Mexico from the tariffs, it would actually make the national security argument for them more defensible before the WTO, Holleyman tells me, since they would no longer be aimed at key national security allies.
But Trump wants to retain leverage over Canada and Mexico in NAFTA negotiations — he’s a winner, remember? — so the exemption will only be temporary. Yet this once again undermines the original national security justification for the tariffs, because it means that a key aspect of the decision over them — whether or not to apply them to Canada and Mexico over the long term — will actually be determined by reasons that don’t have anything to do with national security, i.e., whether progress is being made on NAFTA.
“Tying successful progress on an economic security agreement to the question of whether or not Canada and Mexico remain exempt from the tariffs is literally mixing apples and oranges,” Holleyman told me. “The inconsistency of that can be used as yet another argument against the U.S. by other countries in the WTO, saying that the U.S. is taking action that is contrary to the rules that the U.S. signed up for.”
We all know that Trump has no coherent rationale for these tariffs, which could cost more American jobs than they save and spark a deeply destructive trade war. But that incoherence could actually end up working against Trump’s designs.
Of course, Trump may not end up heeding any WTO judgment against the tariffs, even if that does end up happening, which means the recklessness of this could only end up compounding itself. But that brings us to our next item.
* TRUMP’S TRADE WAR COULD GET A LOT WORSE: Trump’s tariff plan signals that protectionists are ascendant in the White House, and the New York Times reports that foreign officials and Wall Street worry it could get worse than we think:
The rise of the populist faction is already fanning fears on Wall Street and among foreign officials that Mr. Trump could start and escalate a global trade war or take a more combative stance toward trading partners and international groups like the World Trade Organization.
As the Times notes, if challenges are brought and the WTO rules against Trump, he could ignore the ruling or even leave the organization. This is just the beginning, folks.
* FORECASTER: HOUSE IS IN REACH FOR DEMS: The good folks at Sabato’s Crystal Ball now rate the House special election in Pennsylvania’s 18th District a “toss-up,” and shift 25 other races toward Democrats, concluding:
After these ratings changes, for the first time this cycle we have fewer than 218 seats (the number needed for a majority) at least leaning to the Republicans.
But Sabato and company still rate the chances of Dems taking the House at only 50-50, which seems fair enough — there is still a long way to go.
* EVEN A DEM LOSS IN PA-18 SHOULD WORRY GOP: The Sabato’s Crystal Ball analysis also makes this important point about the Pennsylvania special election between Republican Rick Saccone and Democrat Conor Lamb:
Perhaps if Saccone wins going away — high single digits or more — it would reassure rattled Republicans. That seems unlikely; the most recent public polls … showed Lamb up by three points and Saccone up by three. A close result seems likely, which to us is a Democratic win regardless given the lopsided Republican outside spending edge and the generic lean of the district.
And as the Sabato team notes, Pennsylvania is getting a new map that will be less GOP-friendly, anyway, and Lamb will probably run again this fall in a redrawn district.
* REPUBLICANS PANIC ABOUT PA-18: CNN’s John King reports that Republicans are bracing for a loss and expect serious repercussions:
“PA-18 loss coming,” was the morning response of a seasoned GOP hand, a campaign hand with access to the latest data. … The consensus of a half dozen GOP strategists contacted after the [Gary] Cohn resignation Tuesday was that there would be six to 10 additional retirements of House GOP incumbents if PA-18 goes blue.
We might even see more GOP resignations if Lamb loses but comes close, given that Trump won this district by 20 points.
* TRUMP RIDES TO THE RESCUE: The Associated Press reports that the White House is gearing up for a final push to salvage the PA-18 seat, including a visit from the Big Man himself. Saccone is really psyched:
“We’ve got Donald Trump. We’ve got his son. We’ve had Ivanka. What does the other side have? They’ve have crazy uncle Joe Biden,” Saccone told two dozen supporters. … “Everybody wants to help,” the Republican candidate continued. “It’s like President Trump with winning — there’s so much help we’re going to get tired of help.”
This much is guaranteed: If Saccone wins, it will be all because of Trump, and if he loses, it will be because he did not sufficiently emulate Trump.
* GUN BILL MOVES FORWARD IN FLORIDA: After the Parkland massacre, the Florida legislature has passed a gun-control bill and sent it to Gov. Rick Scott (R):
[The bill] would raise the age to buy all firearms to 21 and impose a three-day waiting period for most gun purchases. … [It] also provides new mental health programs for schools and provisions to keep guns away from people who show signs of mental illness or violent behavior. The measure also prohibits “bump stocks,” devices which allow semi-automatic firearms to fire faster.
The bill would also arm some teachers if they trained. But it’s a start — and a reminder that liberals who want gun regulations should channel energy into winning back ground on the state level.
* MAJORITY REJECTS ARMING TEACHERS: A new NBC/Survey Monkey poll finds that Americans disagree with Trump’s call for arming teachers by 56 percent to 42 percent. And:
A whopping 80 percent of Republicans and Republican-leaners are on board with arming teachers, while 88 percent of Democrats and Democratic-leaners disagree with it. A majority of Independents, 64 percent, also disagree with the plan.
That 42 percent of Americans support this insane idea is disconcerting, but 61 percent say government and society can take action to stop mass shootings, which is good to see.