The Trade Deal has Been Struck!

Let's give the Orange man some credit where credit is due. Certainly, there were many more people behind it, but like a quarterback, the president gets blamed for the bad and praised for the good. The trade spat with our allies was a highly unconventional, but ultimately effective way at reshaping a decades old trade corridor in the northern hemisphere.

A hard pill to swallow

I will be first to admit my initial horror at the rhetoric and action coming from Trump and his administration toward our allies in regards to trade. Especially when the biggest threat and most abusive trading partner is China. Fighting a economic war on all fronts seemed ill advised, if not completely suicidal. But in fact, whether due to calculation, or falling ass backward (I tend to believe the former), a deal was struck.

Preliminary reports about the deal appear to reveal actually fair and good deal for all three countries. Of course time will tell, and details are still coming out, but I am impressed. Renegotiating in automobile manufacturing requirements, as well as a big win for American dairy are among a couple of the highlights.

The strategy

Burn it to the ground. Trump came out in a blitzkrieg against NAFTA and often sounded like a deal could never be made. He would be perfectly happy letting the deal fall by the wayside. This is hindsight was genius. We needed something jarring in order to get any traction of revamping this decades old deal. It created a sense of urgency, panic, and compromise that wouldn't have been there without the fire lit under it.

It was also impressively strategic to strike a deal with Mexico first and put the pressure on Canada. Mexico just elected a new president and he surly would be eager to strike a win for his populist movement. Mexico is also more dependent of the U.S. which gives us more leverage in negotiations with them. Starting with Mexico, put extreme pressure on Canada and Prime Minister Trudeau. A young and malleable leader, his hand was weakened after the U.S and Mexico pact.

A message heard around the world.

This deal also sends a message to the rest of our allies that the United States does support and want trade deals. We are not as tariff crazy as we might seem, and sometimes a little hardball is the only way to make anything happen. It also puts more pressure on China who was already caught off guard with the resolve of the Trump administration to follow through with tariff threats. China most likely thought the U.S. would weaken it's position in North America and Europe fighting with its allies, but that didn't last. Now more focus can be put on squeezing China.

Time will tell if this deal is as robust and historic as advertised. As critical as I am of Trump, I must give him credit where it's due. Get a double dose of spray tan tonight.