As Navarro pushed for withdrawal, Homeland Security Secretary John Kelly and others said a perceived threat that the United States might terminate was good leverage, but actually doing it would be catastrophic. The United States would be shooting itself in the foot. The ripple effects would be huge. It would roil the financial markets and lead to instant retaliation. Trading partners around the world would wonder if they were next.
After the meeting broke up, on his way to the Oval Office to go over the documents that Trump wanted prepared, Porter stopped Agriculture Secretary Sonny Perdue, who had just assumed office. Perdue was a former Republican governor of Georgia, the first from his party since Reconstruction.
“Sonny,” Porter said, “why don’t you come in?” Wilbur Ross joined them in the Oval Office.
“NAFTA has been a huge boon for American ag interests,” Perdue told Trump. “We export $39 billion a year to Mexico and Canada. We wouldn’t have markets for these products otherwise. The people who stand to lose the most if we withdraw from NAFTA are your base, the Trump supporters.”
Perdue showed Trump a map of the United States that indicated the states and counties where agriculture and manufacturing losses would be hit hardest. Many were places that had voted for Trump.
“It’s not just your base,” Perdue said. “It’s your base in states that are important presidential swing states. So you just can’t do this.”
“Yeah,” Trump said, “but they’re screwing us, and we’ve got to do something.”
The president finally decided they should amp up the public rhetoric and threat, but not actually send a 180-day notice.
Jared passed word to Porter. “The president’s agreed not to withdraw for now.”
Porter knew that everything with Trump was provisional, but he was surprised how close they had come to the edge. And it was not over.
Peter Navarro slipped into the Oval Office for an ad hoc, unscheduled meeting with the president.
“The only thing we’ve done is withdraw from TPP,” the president said, referring to the Trans-Pacific Partnership. “Why haven’t we done anything else on trade?”
“The staff secretary process is holding all this stuff up,” Navarro said.
“Madeleine,” Trump called to his assistant, Madeleine Westerhout. “Get Rob up here right now.”
Porter ran up the stairs to the Oval Office.
“What the fuck are you stalling for?” Trump said to Porter. “Why aren’t we getting this done? Do your job. It’s tap, tap, tap. You’re just tapping me along. I want to do this.”
The president was serious again. Porter drafted a 180-day notification letter to be signed by Trump that the United States would withdraw from NAFTA.
Porter was more and more convinced that it could trigger an economic and foreign relations crisis with Canada and Mexico. He went to see Cohn.
“I can stop this,” Cohn said to Porter. “I’ll just take the paper off his desk before I leave.” And he later took it. “If he’s going to sign it, he’s going to need another piece of paper.”
“We’ll slow-walk that one too,” Porter promised.
Cohn knew, of course, that the president could easily order another copy, but if the paper was not sitting in front of him, he’d likely forget it. If it was out of sight, it was out of mind.
Porter agreed. Trump’s memory needed a trigger—something on his desk or something he read in the newspaper or saw on television. Or Peter Navarro sneaking into the Oval Office again. Without something or someone activating him, it might be hours or days or even weeks before he would think, Wait, we’re going to withdraw from that, why didn’t we do that? Without a trigger, it conceivably might never happen.
* * *
Sonny Perdue gave a presentation in the Situation Room on May 4 on the role of agriculture in trade. Sensitive intelligence showed that if the United States imposed new tariffs on China, the Chinese would retaliate with their own tariffs.
The Chinese knew exactly how to inflict economic and political pain. The United States was in kindergarten compared to China’s PhD. The Chinese knew which congressional districts produced what products, such as soybeans. They knew which swing districts were going to be important to maintain control of the House. They could target tariffs at products from those districts, or at a state level. The Chinese would target bourbon from McConnell’s Kentucky and dairy products from Paul Ryan’s Wisconsin.
Several days later Wilbur Ross laid out the reasoning on the importance of trade deficits. Echoing the president, Ross said trade deficits are the lodestar and were a mark of our economic instability and weakness. The president was focused on trade deficits, he reminded everyone, and they ought to be focused on them.
Porter took off his honest-broker cap. “Trade deficits don’t matter,” he said, “at least with individual countries. That’s an absurd way of thinking.” His tone was probably the most disrespect that Porter had ever shown to a cabinet officer. “Trade policy, especially the trade deals that we negotiate, isn’t a primary driver of our trade deficit.” That deficit depends on economic conditions, which country can produce various goods most efficiently and cheaply, the savings rate and the value of the currencies. All protectionist policies are not in our economic interest.
“Well,” Ross shot back, “I’ve made billions of dollars and I’ve worked on Wall Street. I know how these markets work. You don’t understand supply and demand.” If the U.S. puts tariffs on China and they retaliate, we will be able to buy products from other countries.
* * *
In the spring of 2017, Ross negotiated a deal with China for the U.S. to import Chinese chicken and export beef. He called it “a herculean accomplishment.” But there was some serious criticism of the deal. A New York Times headline read, “China Surrenders Little to U.S. in First Round of Trade Talks.”
In a meeting at the White House, the president tore into Ross. “I can’t believe you made this deal. Why didn’t you tell anybody? You didn’t tell me about this. You just went off and did it on your own. And it’s a terrible deal. We got screwed. Wilbur, maybe you used to have it.” As an investment banker representing casino bondholders angry at Trump in 1990, Ross had struck a deal with Trump that acknowledged the value of his famous name and allowed him to avoid bankruptcy.
“I thought you were a killer,” Trump said to the 79-year-old Ross. “When you were on Wall Street, you made some of these deals. But you’re past your prime. You’re not a good negotiator anymore. I don’t know what it is, but you’ve lost it. I don’t trust you. I don’t want you doing any more negotiations.” Bob Lighthizer would handle NAFTA and other trade agreements.
Ross tried to defend the deal—the U.S. would be exporting more beef—but Trump had tuned out.
* * *
The president held a meeting on steel tariffs—one of his obsessions—in the Oval Office on June 8. Gary Cohn, Wilbur Ross, Porter and Secretary of Defense Mattis crowded in seats around the Resolute Desk.
“We’re ready to go,” Ross said. “I want to submit this report.” He was recommending tariff rate quotas especially on China. A high prohibitive tariff would be imposed if China increased its current rate of steel exports to the United States.
Porter cited a number of legal problems. The Commerce Department hadn’t consulted with the Defense Department, as required by law, to determine whether the imports posed a threat to national security.
“Yes, we have,” Ross said. “We’ve done that.”
“I’ve never been consulted on anything related to any of this,” Mattis said.
“That’s all right,” Ross replied. He had talked to the assistant secretary of defense who dealt with these issues. He had some emails documenting this.
“Well,” Mattis said, “you never talked to me.”
Porter jumped in to point out that the law said that the defense secretary had to be consulted, not just someone in the department.
These were the legal bureaucratic niceties that drove Trump crazy. “Wilbur, talk to Jim! Get this sorted out,” he said. “I’m sick and tired of dealing with this. And get it done quickly, because I want to do this.”