President Trump seems to have been caught off-guard by the breakdown of trade talks with China — which, in fairness to him, really does seem to have been driven by an abrupt shift in negotiating position by the Chinese, forcing him to rethink his broader strategy on global trade.
At the same time as Trump has escalated his trade dispute with China — raising tariffs and threatening to impose them on more categories of goods — he has de-escalated such disputes with other partners: He has announced a six-month delay on the imposition of threatened global tariffs on imported cars, as well as a deal to end tariffs on steel and aluminum from Canada and Mexico.
Trump does not seem happy to have had to make these moves. In a speech on Friday, he continued to complain that Europe exports too many cars to the United States, saying, “They send Mercedes-Benzes here like they’re cookies.” And yet he’s holding off on tariff hikes on those Benzes, at least for now. He has recognized, however grudgingly, that if the fight with China is going to require more threats and more time, he’s going to have to pick his battles.
The rollback of the metal tariffs for Canada and Mexico is a capitulation to demands from both Canadian lawmakers and Republican senators, who have said they wouldn’t approve Trump’s revised version of NAFTA until the tariffs go away. I still wouldn’t expect ratification soon — House Democrats would have to approve the deal, too, and they have a separate set of demands they still want met. Nor are they eager to hand Trump a victory. But even if the deal is never ratified, withdrawing the metal tariffs reduces the level of friction with countries that could be our allies in trade disputes with China if we (i.e., Trump) weren’t constantly antagonizing them.
All of this looks like a nod at something Trump hates: multilateralism. He’s not about to resurrect the Trans-Pacific Partnership — one purpose of which was supposed to be to unite our trading partners around the Pacific into a shared negotiating position regarding China — but he does seem to be learning that we need some of these countries as partners, or at least that we can’t take on everyone at once.