Events around Trump can unfold and refold so fast, one cannot keep up. As I was writing and editing this piece, the total circumstance changed three times, not counting the extra little twists and turns, making it impossible to chronicle Trumps actions as they are happening.
In a mind numbing, head spinning whirl, President Trump started with an executive order to build the great wall that realistically wasn’t going anywhere. When Trump saw the situation was developing badly, he made it worse. When that didn’t work, he escalated it and made it much, much worse. When the situation was about to turn into a complete disaster, he tried to bluff his way out and blame it all on Mexico, and when he got called, he tried to out-bluff again. The President of Mexico then tipped over the table and stormed out.
At last, with Congress getting more and more restless, with the realities of international trade beginning to sink in, and with relations between the countries on the brink of disaster, Trump did a silent u-turn and stuffed everything back in the box. The situation is left in limbo, essentially where it started, with nothing positive to show for the hullabaloo that was created. There is an empty executive order to proceed with the wall, but no plans, no money and no means of implementing anything. There is a very angry President Nieto in Mexico, a Mexican press that is boiling over, and a population in Mexico growing more upset with the situation in the United States every day. There is a puzzled ally to our north wondering if Trump has something against Canada that is going to explode, and finally, there is a befuddled White House press with a yard full of inconsistent statements to unravel, and anyone who has been trying to keep up left with a fistful of torn-up and scratched out notes, as the administration’s version of events changed from moment to moment.
As Thomas Friedman pointed out on Meet the Press recently, and what Trump and his cabal of amateurs running the White House do not yet seem to understand, everything in today’s economy is global and everything global is networked. One cannot touch one aspect of anything without reactions and counter reactions spinning through the network to impact trade everywhere.
Mexico is our third largest trading partner. We do over half a trillion dollars in trade with Mexico every year, and, if we don’t screw it up, this could continue to burgeon. President Trump seems bound and determined to screw it up. Trump, who has promised to find jobs, increase trade and improve the economy, wants to build a 30 foot wall between us and our third largest trading partner, and perhaps impose as much as a 20% tariff on all imports.
The current flap all started with an executive order that mentioned beginning construction of the border wall between the United States and Mexico. Trump’s campaign mantra. But there is no money, no source of funding mentioned in the order, and no mechanism for obtaining funds. Congressional leadership indicated that tax revenues would not be available. Without a means to implement construction, the executive order was meaningless – other than perhaps for its value as a token to Trump’s base that he was thinking about the promises he made.
When the White House press made this point to Trump, he hauled out his bumper sticker from the campaign and insisted that Mexico would be expected to pay for the wall. Now, it is one thing for this kind of statement to be made by a candidate for election. The American press, and certainly the world in general, does not place much weight on campaign rhetoric. It is quite another thing, however, when the statement is made by the sitting President of the United States.
Mexico’s President Pena Nieto firmly declared that Mexico had no intention of paying for the wall. Trump rejected this demurrer, and repeated that it would so be paid for by Mexico, eventually, one way or another. In response to this arrogant stance, Nieto suggested that if this was Trump’s position, the state visit should be postponed. Trump promptly replied that until Mexico displayed a more respectful attitude towards the United States’ position, the meet should not happen. The Mexican president declared the next morning that the meeting was off. Trump replied with a harrumph that it was a mutual decision.
The developing situation ended for the day with Sean Spicer’s explanation that funding for the Mexican border wall would come from a 20% import tax – a tariff – that, notwithstanding the clear prohibitions of NAFTA, Trump proposed to impose upon Mexican imports. This set off a blizzard of protest from every quarter. The tariff, of course, would not be a tax on Mexico but on the American consumer. A tariff as stiff as 20% would materially impact trade – all of it, not just the imports, and if U.S. – Mexico trade was impacted, the effects would reach around the world. Everything is networked, remember – one cannot affect one segment without the reactions being felt everywhere. Every competent economist that has looked at this has reported that an untargeted general tariff of this size against imports of this magnitude could well precipitate a global recession.
As the press reported it, President Trump insulted the sovereignty of Mexico on several levels, proposed an intent to breach the trade relations that have existed between the two countries for almost 25 years, and then suggested that Mexico was being disrespectful. Both English and Spanish fail to provide words to describe this developing situation; in Yiddish, however, characterizing brash and insulting behavior has been elevated to a fine art: one then might say the arrogant chutzpah of the new U.S. President trying to cast the blame for any of this upon the Mexican President is jaw-dropping.
Trump’s reaction to this whirling piece of meshuggeneh has been to turn about and walk away. He has not withdrawn or undone anything. There was a telephone call between the two presidents that more or less patched things up personally, but no definitive agreements were reached. We are now advised by Spicer that the 20% tariff was never an actual proposal, but just an idea – it might be 5% or 10%, or not at all – as Trump was just sounding out possibilities. The Congressional reaction towards providing funds to build the wall is unchanged, and Trump has made no further formal request in this area. The executive order is still outstanding, and the meeting with the President of Mexico has not been rescheduled.
These events are still unfolding. Whether the damage to our relations with Mexico can be repaired would seem to be up to Trump. Right now, only egos are involved; no real damage to either country has occurred. But if Trump stays true to his reactions towards every potential crisis up to now, and cannot be counseled to pay attention to the comments of the likes of Thomas Friedman and realize that everything is interrelated, then one may well expect that things eventually will in fact get much, much worse.