<html><head><meta http-equiv="Content-Type" content="text/html charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><a href="http://www.newyorker.com/news/john-cassidy/trumps-nafta-reversal-confirms-the-globalists-are-in-charge-for-now" style="color: rgb(149, 79, 114);" class="">http://www.newyorker.com/news/john-cassidy/trumps-nafta-reversal-confirms-the-globalists-are-in-charge-for-now</a><o:p class=""></o:p></div><h1 style="margin-right: 0in; margin-left: 0in; font-size: 24pt; font-family: 'Times New Roman', serif;" class="">Trump’s NAFTA Reversal Confirms the Globalists Are in Charge—For Now<o:p class=""></o:p></h1><h3 style="margin-right: 0in; margin-left: 0in; font-size: 13.5pt; font-family: 'Times New Roman', serif;" class="">By <a href="http://www.newyorker.com/contributors/john-cassidy" title="John Cassidy" style="color: rgb(149, 79, 114);" class="">John Cassidy</a><o:p class=""></o:p></h3><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""> April 27, 2017<o:p class=""></o:p></div><p class="descender" style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;">On Wednesday morning, <a href="http://www.politico.com/story/2017/04/26/white-house-nafta-withdraw-trump-237632" target="_blank" style="color: rgb(149, 79, 114);" class="">Politico reported</a> that Steve Bannon, the self-styled “economic nationalist” who is Donald Trump’s senior political strategist, and Peter Navarro, the free-trade skeptic who heads up the newly formed National Trade Council at the White House, had drafted an executive order signalling the Administration’s intention to withdraw from the North American Free Trade Agreement. “A draft order has been submitted for final stages of review and could be unveiled late this week or early next,” the Politico story said. Other media outlets followed up with their own reports, based on guidance from unnamed Administration officials, saying that Trump was preparing to possibly sign the executive order on Saturday, his hundredth day in office.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">The reaction to these revelations was immediate: nervousness in the financial markets—the value of the peso fell—and astonishment on Capitol Hill, including in the Republican ranks. Senators John Cornyn, John McCain, Jeff Flake, and Lindsey Graham all publicly urged the White House to reconsider, with McCain saying that withdrawal from <span style="font-size: 10pt;" class="">NAFTA</span> would be “disgraceful and a disaster.”<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">The White House was busy on Wednesday rolling out an outline of Trump’s tax plan, but it did apparently find the time to reconsider. There was a meeting of the National Economic Council, which is headed by Gary Cohn, the former president of Goldman Sachs, and includes Steve Mnuchin, the Treasury Secretary—both of whom are known as supporters of free trade. And on Wednesday afternoon, Trump spoke by telephone with Justin Trudeau, the Prime Minister of Canada, and Enrique Peña Nieto, the President of Mexico. Late Wednesday night, the White House <a href="https://www.whitehouse.gov/the-press-office/2017/04/26/readout-president-donald-j-trumps-call-president-pe%C3%B1a-nieto-mexico-and" target="_blank" style="color: rgb(149, 79, 114);" class="">issued a statement</a> that said, “President Trump agreed not to terminate <span style="font-size: 10pt;" class="">NAFTA</span> at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the <span style="font-size: 10pt;" class="">NAFTA</span> deal to the benefit of all three countries.”<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">On Thursday morning, Trump confirmed that he wouldn’t be signing the executive order. “I received calls from the President of Mexico and the Prime Minister of Canada asking to renegotiate <span style="font-size: 10pt;" class="">NAFTA</span> rather than terminate. I agreed,” he <a href="https://twitter.com/realDonaldTrump/status/857552956836786177" target="_blank" style="color: rgb(149, 79, 114);" class="">tweeted</a>. A bit later, before a meeting with Argentinian President Mauricio Macri, he <a href="http://www.cnn.com/2017/04/26/politics/trump-nafta/" target="_blank" style="color: rgb(149, 79, 114);" class="">provided a few more details to reporters</a>, saying, “I decided rather than terminating <span style="font-size: 10pt;" class="">NAFTA</span>, which would be a pretty big, you know, shock to the system, we will renegotiate.”<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">To those concerned about the Trump Administration’s unpredictable unilateralist tendencies, this decision came as a relief. But how close did Trump get to taking a deeply irresponsible action? And what does this incident portend about where power lies in the White House?<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Trump has said all along that he wants to renegotiate <span style="font-size: 10pt;" class="">NAFTA</span>, yet much of the detailed groundwork for such a set of talks has yet to be done. Indeed, the White House’s nominee for U.S. Trade Representative, Robert Lighthizer, hasn’t even been confirmed yet. If Trump had gone ahead and signed an executive order to pull the United States out of <span style="font-size: 10pt;" class="">NAFTA</span> now, he would have short-circuited the entire negotiation process, and signalled to the world that the lunatics were running the asylum.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">At a briefing in Ottawa on Thursday, Trudeau indicated that, when he spoke to Trump on Wednesday, the President “was very much thinking about cancelling.” <a href="http://www.reuters.com/article/us-usa-trade-nafta-idUSKBN17S2DG" target="_blank" style="color: rgb(149, 79, 114);" class="">Trudeau said</a>, “I highlighted quite frankly . . . that a disruption like cancelling <span style="font-size: 10pt;" class="">NAFTA</span>, even if it theoretically eventually might lead to better outcomes, would cause a lot of short- and medium-term pain.” It is safe to assume that Cohn, Mnuchin, and others made similar arguments inside the White House, and in the end they won out over Trump’s apparent desire to make a dramatic announcement this week.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Ultimately, this incident provides further evidence that the globalists in the Administration are taking charge of economic policy. The Bannon faction, which had already suffered a number of setbacks, seems to have lost another battle. And while Trump clearly still personally holds some instinctive enthusiasm for Bannon’s protectionist agenda, he’s yet to really act on it.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Many people on Wall Street twigged to this a good while ago. That’s one reason the stock market has done so well in the last few months. If investors believed a full-scale trade war were a serious possibility, the markets would have tanked. The smart money assumed Trump would eventually accept the advice of his more moderate advisers, and that assumption has been vindicated.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">To be sure, this doesn’t mean that there won’t continue to be international tensions over trade, angry outbursts from Trump, or the occasional bit of actual protectionist policy. Having run the sort of campaign he did, the President has to offer some red meat to his supporters. Here, his Commerce Secretary, Wilbur Ross, appears keen to provide it. It was Ross who announced, at the start of this week, that the United States would <a href="https://www.wsj.com/articles/trump-administration-plans-to-impose-20-tariff-on-canadian-soft-lumber-imports-1493075372" target="_blank" style="color: rgb(149, 79, 114);" class="">impose a twenty-per-cent tariff</a> on softwood lumber imported from Canada. And last week, Ross oversaw the launching of an investigation into the <a href="https://www.wsj.com/articles/trump-administration-launches-national-security-probe-on-steel-imports-1492712013" target="_blank" style="color: rgb(149, 79, 114);" class="">national-security implications of steel imports</a>.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><a name="/3" class=""></a><a name="/2" class=""></a>In imposing the tariffs on Canadian lumber, Ross was sending a signal that the Trump Administration is serious about redressing what it sees as wrongs. But this action needs to be kept in perspective. For more than a decade, the United States has been accusing Canadian producers of dumping their products in the U.S. at below-market prices. An agreement reached in 2006 expired in 2015, and the two sides have been <a href="http://www.cbc.ca/news/politics/softwood-lumber-canada-united-states-filing-friday-1.3868117" target="_blank" style="color: rgb(149, 79, 114);" class="">sniping at each other</a> ever since. Relatively speaking, the dispute is a minor one, however: the roughly $5.5 billion of softwood lumber that Canada sells to the U.S. accounts for just a fifth of one per cent of over-all U.S. imports.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">And Canada is a safe target. During the campaign, the main targets of Trump’s trade rhetoric were China and Mexico. He accused China of manipulating the value of its currency and cheating on its trade agreements. He described <span style="font-size: 10pt;" class="">NAFTA</span> as the “worst trade deal in the history of the world.” And he promised that, once he took office, things would change radically.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">They haven’t, really. Immediately after his Inauguration, Trump did sign an executive order pulling the United States out of the Trans-Pacific Partnership, but that was a fledgling agreement that hadn’t been ratified. At a meeting with Xi Jinping, the Chinese President, earlier this month, Trump agreed to a Chinese proposal that trade issues should be dealt with, at least initially, by teams of experts from both countries. In addition, he offered to go easy on the Chinese if they agreed to restrain North Korea’s nuclear ambitions. “I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem!” he said in <a href="https://twitter.com/realDonaldTrump/status/851766546825347076" target="_blank" style="color: rgb(149, 79, 114);" class="">an April 11th tweet</a>. He has also <a href="http://www.bbc.com/news/business-39583571" target="_blank" style="color: rgb(149, 79, 114);" class="">dropped his claim</a> that China is a currency manipulator.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">This sort of pragmatism—or inconsistency, if that’s what you want to call it—is what reassures investors and others that Trump’s Presidency won’t upend the global trading system. But the fact that he seriously considered signing the <span style="font-size: 10pt;" class="">NAFTA</span> executive order, and the flip manner in which he reversed course, demonstrates that nothing is set in stone. With Trump, you never know for sure.<o:p class=""></o:p></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif;" class="">John Cassidy has been a staff writer at <em class="">The New Yorker</em> since 1995. He also writes a <a href="http://www.newyorker.com/news/john-cassidy" style="color: rgb(149, 79, 114);" class="">column about politics, economics, and more</a> for <a href="http://newyorker.com" style="color: rgb(149, 79, 114);" class="">newyorker.com</a>.</p></body></html>