President Trump is known for his capacity to shift positions on policy issues, most recently with regard to US foreign policy in Syria. US trading partners increasingly have reason to think he will do so on trade.
The White House moved last month to take a comprehensive look at trade deficits before taking any retaliatory actions and also backed off calls to blow up the North American Free Trade Agreement (NAFTA). This month, Trump’s softening stance on trade continued with an especially amicable meeting with Chinese President Xi Jinping, devoid of threatening words on trade.
What’s behind the turn around? Much has been made of a New York Post interview with Trump on Tuesday, during which the president confided impatience with White House chief strategist Steve Bannon’s scuffles in the Oval Office.
“Steve is a good guy, but I told them to straighten it out or I will,” said Trump, suggesting to many observers that Trump would be willing to sacrifice Bannon for peace in the West Wing.
Bannon is considered by many to be the most influential member of the administration’s nationalist wing. Along with National Trade Office head and China-hawk Peter Navarro, Bannon is considered a key architect of Trump’s protectionist policy proposals. As we have noted previously, Navarro has already been downgraded in stature, and we are hearing word that he did not go to Mar-a-lago for the Trump-Xi meeting.
It looks like the stars are aligning for global trade to win the day in the US. Now, the watching and waiting game moves to Europe, where the battle between globalism and nationalism rages on ahead of elections in France, Germany and Italy.