Donald Trump’s abrupt departure from the G7 summit in Canada reverberated across the globe, sparking a storm of increased confrontation between international leaders. With critical deadlines creeping ever closer, they are painfully running out of new trade agreements. Trump has just four weeks to wrap up important bilateral trade agreements with South Korea, Colombia and Panama. In short, the pressure is building to improve American companies’ access to foreign markets. His administration just established a really important deadline—for all parties to reach an agreement by July 9. Two months of hard talks later, Trump has only been able to deliver two deals.
On one flight aboard Air Force One, though, Trump was confident enough to tell reporters that “We’re making a lot of money.” During his remarks he did indicate a modicum of hope over current trade discussions, especially with the European Union. When pressed about the status of these talks, he asserted, “They’re either going to make a good deal or they’ll just pay whatever we say they have to pay.”
Trade War Takes Center Stage
Trump’s early months in office have been dominated by trade negotiations, overshadowing other pressing domestic issues such as immigration raids and a vast policy agenda. Yet, in the face of these challenges, Trump has gone all-in on his trade agenda. His stated intention is to ensure pacts that will invigorate US manufacturing and agriculture.
During the G7 meeting, Trump sought to use one-on-one conversations with world leaders to press his trade agenda. Many of those leaders left the summit disappointed, with no fresh funding or commitments announced from the US. The President’s overall strategy did call for pursuing frameworks to start negotiations with other countries, but little progress has been made. To date, the United Kingdom and China are the only ones to have outlined terms with consensus on trade through frameworks.
When pressed about Japan’s tough negotiating stand, Trump said, “The Japanese are very tough.” His remarks evidence the challenge when negotiating deals with other countries, especially those with robust trade norms.
Rising Challenges in the Middle East
…-often, if not always, at cross-purposes Trump’s mounting trade challenges. Meanwhile, he is increasing his engagement in international relations, particularly the worsening war between Israel and Iran. He left the G7 summit early to address these pressing matters, which could further complicate his ability to focus on trade negotiations.
Now, from the moment he entered the race, Trump’s economic team has hammered the point that we need to get better trade deals. They claim that foreign market access is the Holy Grail, promising sizable gains for American agriculture and manufacturing. “We can get them done. We need to open these other countries’ markets,” said a member of Trump’s economic team. The urgency of getting these spending agreements in place increases as the September 30th deadline approaches.
As tensions mount in the Middle East and negotiations stall, the President’s ability to navigate both arenas will be critical. The specter of raising tariffs herself hangs as a threat if significant agreements are not achieved by the cut-off date.
The Road Ahead
After claiming a few recent wins on the trade front, the Trump administration has realized that time is indeed short. Just a few agreements have been completed to date. The pressure will be on the President and his team to prove these are indeed results. Good shape isn’t good enough for the United States of America. We’re looking for big wins that are really transformative for America,” stressed a senior advisor.
As Trump doubles down on his efforts to negotiate new deals, he’s starting to come under criticism for the failure of his trade war. As Federal Reserve Chair Jerome Powell testified earlier this month, we’re starting to see those first effects already. He hopes to see deeper systemic change moving forward.