Trump: Baffling strategy Photo credit: BLOOMBERG
Was it persistence or exhaustion that led the U.S. and Mexico to the framework of a trade agreement last week?
We may never know. But it’s nice to see some light at the end of a tunnel that at times turned very dark and foreboding for the auto industry.
NAFTA needed retuning, and all parties agreed on that. The philosophical foundation was already in place for an updated win-win-win agreement that kept all three nations at the table, recognized new industry realities and dealt with disparities in wages and labor standards that tilted the playing field unfairly. All that needed work was the details.
So it’s still baffling that President Donald Trump and his negotiating team chose the route they did, playing loose with facts, threatening to cripple the auto industry in the name of saving it, and expecting that two proud neighbors, allies and trading partners would willingly accept humiliation, and even punishment, at the bargaining table. The process was needlessly chaotic and disruptive.
The Mexicans, to their credit, played the long game, refusing to be rushed into an agreement by their own election campaign dynamics, and recognizing that Trump and his allies may not have the same luxury.
If the reports are true that Mexico has accepted an auto export cap that would trigger possible U.S. tariffs if exceeded, it must have felt safe in betting that Trump wouldn’t be willing, or even around, to try to enforce it.
But no bet is safe with Trump. Mexico has to be careful, as does Canada as it plugs into the discussions, as well as the auto universe that depends on the free flow of goods across North America.
Others who thought they had placated or outfoxed Trump ultimately found themselves forking over their lunch money at the next corner.