The president’s decision last week to unilaterally boost tariffs on $200 billion of Chinese imports produced an entirely predictable response — retaliatory tariffs from Beijing on $60 billion worth of U.S. products, a freakout by the financial markets and a screaming plunge in the Dow and other major indexes.
The administration’s trade talks with China had reportedly been going well and were supposed to be nearing an end. Trump accused the Chinese of trying to renege on concessions at the last minute, but the president’s history suggests otherwise. Veterans of the high-stakes world of New York real estate have told me about what they described as Trump’s standard negotiating practice — pitching some kind of fit at the very last minute, when the other party thought things were settled, in hopes of bullying his way to a better deal.
That might work with a subcontractor who doesn’t have the power to say no, or even with a fellow developer who vows on the spot never to do business with Trump again. But would any skilled negotiator think such a stunt would work with China, the world’s second-greatest economic power? Wouldn’t the Chinese government have to react in kind, if only as a matter of sovereign pride? And wouldn’t startled investors conclude that their fear of a serious trade war — the kind with no winners, only losers — had been realized?
I assume Trump realizes that China isn’t really “paying” the tariffs and that the cost is in fact borne by U.S. consumers, who will pay higher prices for made-in-China goods. Either the president constantly lies about this on his Twitter feed, hoping to fool the gullible, or he’s even more clueless about trade than I imagined.
Here are a few confident predictions: In the end, Trump will have succeeded only in further spooking the skittish financial markets. If there is a U.S.-China deal, it will be no more favorable — perhaps less favorable, I fear — than the deal Trump could have gotten before his little power play. And if there’s not a deal, well, the president will spend the summer trying to badger the Federal Reserve into cutting interest rates in an attempt to keep the economy from sliding into recession.
Meanwhile, Trump will scramble to ease the pain he is causing his red-state supporters to suffer. He said Monday he would somehow channel billions of dollars in what amount to welfare payments to farmers whose livelihood depends on selling soybeans and other products to China. This is typical Trump — make a mess, then try to clean it up. It is no way to run a mom-and-pop store, let alone a great nation.
It was Jeb Bush who warned that Trump would be “a chaos president,” and he was right. Alas for the world, the administration’s willy-nilly approach extends beyond trade policy.
One of Trump’s most significant foreign-policy decisions was to withdraw last year from the nuclear deal that the Obama administration had reached with Iran — even though the Trump administration acknowledged that the Iranians had been faithful to the agreement. Iran and other signatories are still observing the 2015 deal’s terms, yet Trump has steadily increased U.S. pressure on the Iranian economy. But to what end?
Predictably, Tehran is bristling. As tensions rise, world leaders have become concerned that the United States and Iran could bluster and blunder their way into armed hostilities. Secretary of State Mike Pompeo crashed a meeting of European Union foreign ministers Monday to ease the diplomats’ fears. Reportedly, he failed.
No one can have any confidence that this administration has thought out a step-by-step plan for anything. Look at the situation in Venezuela. There, the administration took a page from the Obama playbook — multilateralism — and assembled an impressive coalition of nations to demand President Nicolás Maduro’s ouster. But the effort to depose Maduro has failed, and he retains the support of the powerful military. Now what?
There are many fitting words to describe the Trump administration. One of the simplest is “dumb.”