Trump stakes reputation as dealmaker with tariff policy

Economic Times

2 days ago

Donald Trump is staking his reputation as a tough negotiator and slick dealmaker -- that has served him well throughout his life -- with his ultra-muscular, protectionist tariffs policy.On Friday, the White House released a picture of the US president seen with a smartphone pressed to his ear, with the caption: "Making calls. Making deals. MAKING AMERICA GREAT AGAIN!"Every trade deal announced by the president, who is convinced that tariffs are both a tool and manifestation of America's economic might, is celebrated by his supporters as a show of his negotiating prowess.This week's flurry of rate changes was no different.
On Thursday, with the stroke of a black marker, the former real estate developer slapped fresh tariffs on dozens of US trade partners.
They will kick in on August 7 instead of August 1, which had previously been touted as a hard deadline.The Republican leader's backtracking, frequently setting trade deadlines only to rescind or extend them -- he most recently granted Mexico a 90-day extension -- has given rise to the mocking acronym "TACO" ("Trump always chickens out"). The jokes implying Trump is all talk and no action on trade have previously struck a nerve for the president.
Not chicken But analysts believe there will be no going back this time.Trump has "not chickened out," according to Josh Lipsky, an international economics expert at the Atlantic Council think tank.Lipsky told AFP the president is "following through, if not exceeding" what he vowed during his campaign in respect to tariffs.Matthew Aks, a public policy analyst at Evercore ISI, said he did not anticipate a "massive shift" on the latest order, aside from some economies like Taiwan or India striking deals during the seven-day buffer.Following crunch negotiations leading up to the tariffs announcement, Trump struck a series of compromises, notably with the European Union, Japan, and South Korea, setting varying tax rates and touting high investments in the United States. The details of these agreements remain vague and leave the door open to key questions: Are exemptions possible? What will become of key sectors like automobiles, pharmaceuticals, semiconductors? And what of China?The US president and leaders of other countries "have reasons to avoid going into detailed agreements" explained Aks, allowing all sides to present the deals in the most positive, or least negative, way possible to their public.The ability to conclude deals -- often with or without crucial detail -- is, for the 79-year-old Republican, an integral part of his political signature.
Art form In his book "The Art of the Deal," the billionaire wrote: "Deals are my art form. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals. That's how I get my kicks."Trump explained in his book that he always "protects" himself "by being flexible." "I never get too attached to one deal or one approach."But despite comments about his trade policy reversals, Trump has hardly budged from his trade strategy, and that could prove politically painful.In a survey conducted by Quinnipiac University published in mid-July, only 40 percent of respondents said they supported the president's trade policy, while 56 percent criticized it. The latest employment figures bear the marks of Trump's protectionist offensive, according to experts. Job creation in May and June was revised sharply downward, falling to levels not seen since the Covid-19 pandemic.