He was going to tear all those terrible trade deals up and negotiate something just terrific. He promised. He was the best negotiator and everyone else sucked eggs. He alone could fix it, along with so many other things like health care.
Last week, the White House tried to make a big show of Donald Trump taking the bull by the horns on trade by signing two new executive orders. He ultimately gave a quick statement then fled the room without signing anything as reporters hurled questions at him about Michael Flynn. He either forgot to sign them or simply found the process of governing so tedious that he bolted. Both scenarios hold greater meaning for Trump's floundering presidency. But where trade is concerned, corporations are starting to call Trump’s bluff, writes Paul Krugman:
Business seems to have decided that Mr. Trump is a paper tiger on trade: The flow of corporate relocations to Mexico, which slowed briefly while C.E.O.s tried to curry favor with the new president, has resumed. Trade policy by tweet, it appears, has run its course.
Investors seem to have reached the same conclusion: The Mexican peso plunged 16 percent after the election, but since Inauguration Day it has recovered almost all the lost ground.
The administration has also been circulating a letter on Capitol Hill detailing new demands on NAFTA (the North American Free Trade Agreement) that, far from decimating the deal, was considered “relatively benign.” Not exactly the sea change candidate Trump called for on what he declared the “worst trade deal” ever.
So why has Trump backed off all that tough trade talk? Remember his revelation on health care reform a couple months ago: Nobody knew it could be so complicated. Trump's really been in for some surprises on trade too.
Consider the case of automobiles. At this point it makes little sense to talk about a U.S. auto industry, a Canadian auto industry or a Mexican auto industry. What we have instead is a tightly integrated North American industry, in which vehicles and components crisscross the continent, with almost every finished car containing components from all three nations.
Overhauling NAFTA—likely just another victim of Trump’s campaign rhetoric meeting the reality of governance. May there be a million more.