WASHINGTON (news agencies) — President Donald Trump and his advisers promised a lightning round of global trade negotiations with dozens of countries back in April.
White House trade adviser Peter Navarro predicted “90 deals in 90 days.’’ Administration officials declared that other countries were desperate to make concessions to avoid the massive import taxes – tariffs — that Trump was threatening to plaster on their products starting July 9.
But the 90 days have come and gone. And the tally of trade deals stands at two – one with the United Kingdom and one with Vietnam. Trump has also announced the framework for a deal with China, the details of which remain fuzzy.
Trump has now extended the deadline for negotiations to Aug. 1 and tinkered with his threatened tariffs, leaving the global trading system pretty much where it stood three months ago — in a state of limbo as businesses delay decisions on investments, contracts and hiring because they don’t know what the rules will be.
“It’s a rerun, basically,’’ said William Reinsch, a former U.S. trade official who’s now an adviser with the Center for Strategic and International Studies think tank. Trump and his team “don’t have the deals they want. So they’re piling on the threats.”
The pattern has repeated itself enough times to earn Trump the label TACO — an acronym coined by The Financial Times’ Robert Armstrong that stands for “Trump Always Chickens Out.”
“This is classic Trump: Threaten, threaten more, but then extend the deadline,” Reinsch said. “July 30 arrives, does he do it again if he still doesn’t have the deals?’’ (Trump said Tuesday that there will be no more extensions.)
The deal drought represents a collision with reality.
Negotiating simultaneously with every country on earth was always an impossible task, as Trump himself belatedly admitted last month in an interview with the Fox News Channel. (“There’s 200 countries,’’ the president said. “You can’t talk to all of them.’’) And many trading partners — such as Japan and the European Union — were always likely to balk at Trump’s demands, at least without getting something in return.
“It’s really, really hard to negotiate trade agreements,” which usually takes several months even when it involves just one country or a small regional group, said Chad Bown, an economic adviser in the Obama White House and now senior fellow at the Peterson Institute for International Economics. “What the administration is doing is negotiating a bunch of these at the same time.’’
The drama began April 2 – “Liberation Day,’’ Trump called it — when the tariff-loving president announced a so-called baseline 10% import tax on everybody and what he called “reciprocal’’ levies of up to 50% on countries with which the United States runs trade deficits.
The 10% baseline tariffs appear to be here to stay. Trump needs them to raise money to patch the hole his massive tax-cut bill is blasting into the federal budget deficit.
By themselves, the baseline tariffs represent a massive shift in American trade policy: Tariffs averaged around 2.5% when Trump returned to the White House and were even lower before he started raising them in his first term.
But the reciprocal tariffs are an even bigger deal.
In announcing them, Trump effectively blew up the rules governing world trade. For decades, the United States and most other countries abided by tariff rates set through a series of complex negotiations known as the Uruguay round. Countries could set their own tariffs – but under the “most favored nation’’ approach, they couldn’t charge one country more than they charged another.
