Trump NAFTA negotiations: Freezing Canada out from the Art of the Deal

President
Donald Trump talks with Canadian Prime Minister Justin Trudeau
during the Women’s Entrepreneurship Finance event at the G20
Summit in Hamburg, Germany, Saturday, July 8,
2017.
Evan
Vucci/AP

• President Donald Trump doubled down on efforts to
  pressure Canada into concessions.
• Analysts see the threats as all talk and ultimately
  expect a trilateral NAFTA deal. 
• The approach mirrors those written about in The Art of
  the Deal, which other 
  world leaders have
  increasingly caught on to. 

After
agreeing to compromise with Mexico on key NAFTA issues
Monday, President Donald Trump doubled down on efforts to
pressure Canada into concessions.

He threatened to terminate the three-country accord entirely and
impose tariffs on Canadian automobile imports if its neighbor did
not join the two countries. He even claimed a new agreement would
be called the “United States-Mexico Trade Deal.”

Of course, many analysts predict that’s all talk. Mexican
President Enrique Peña Nieto immediately pushed back on
comments excluding Canada, which was set to begin
high-level meetings with the Trump administration in
Washington a day later.

“Although the exact timing is uncertain, we expect the countries
to ultimately reach a trilateral deal, avoiding the serious
consequences that would have resulted from President Trump
carrying out his threat to withdraw from NAFTA,” a UBS report out
Tuesday said. 

Trump’s NAFTA approach was “straight from his Art of the Deal
playbook,” according to Paul Ashworth, chief US economist at
Capital Economics. The
1987 book that Trump coauthored with Tony Schwartz brands
successful negotiations as zero-sum games won by keeping
others on their toes and maximizing leverage. 

Hugo Perezcano Diaz, former head of international trade for
the Ministry of Economy in the Mexican government, told Business
Insider in early August he thought a NAFTA deal could be reached
in coming months — but games the president is known to play
seemed to keep optimism at bay.  

“I don’t think we’re over [the possibility of] President Trump
ultimately tweeting one morning that the US is withdrawing from
NAFTA,” Perezcano Diaz said at the time. 

The feeling isn’t unique to NAFTA partners. Sowing confusion and
uncertainty in attempt to gain leverage has been a cornerstone
strategy Trump has turned to in the trade wars he has started
with Europe, China, and other major business partners. 

But as Jonathan Swan of Axios reports, other
world leaders have learned to lever Trump’s negotiating
technique against him. That seems to especially be the case with
China, which analysts note could have less to lose from tariffs
than the US.

“The Chinese have absorbed this lesson the best,” Swan said.
“They have engaged in a trade war with no armistice in sight. …
China is fully prepared to retaliate and out-wait America.”

In a July meeting in the Oval Office, a smiling French President
Emmanuel Macron told Trump he wasn’t planning to negotiate
yet. 

“I read the Art of the Deal,” he said. “I know that we need
to retaliate first so we have some leverage in the
negotiation.”