The recently released transcript of a January 27 call between President Donald Trump and Mexican President Enrique Pena Nieto is a real-time witness to the American president executing one of his now recognizable negotiation devices, the “Trump Reverse Bluff.”
Not familiar with this tack? In a regular bluff, the person who made the bet should be the only one at the table who knows he’s bluffing. But, with the Trump Reverse Bluff, the man who made the bet is the only one at the table who doesn’t know that he’s bluffing.
{mosads}In this case, President Trump threatened to impose new customs duties on Mexican goods unless Pena Nieto agreed to stop publicly stating the obvious: That Mexico will not pay for any part of a wall built by the United States on our own side of the border for our own purposes. Instead, Trump insisted, the two leaders should answer the cost question by saying “we will work it out.”
President Pena Nieto “called” the American leader’s bluff by calmly ignoring the threat, retaining the Mexican position that it will not pay for the wall, and suggesting that Trump stop saying otherwise so the press might cease asking the question.
To make matters worse, the Mexican leader had called the same bluff the day before, by ignoring the same tariff threats as he canceled a summit with President Trump. In other words, Trump — the man who “wrote the book” on negotiation — had his bluff called, and then repeated the bluff only to watch it immediately called again.
If you’re wondering, the Mexican president knew that Trump was bluffing because the United States was already imposing the maximum of each type of customs duty on Mexican goods that we were legally permitted to levy under NAFTA and the WTO agreements, under existing conditions. Withdrawing from those trade agreements would have had immeasurable cost to the U.S. economy, and breaching them under those circumstances on that scale would have risked worse.
In other words, the Mexican leader understood what the American president apparently did not: That it wasn’t even remotely possible for the United States to impose the threatened new tariffs on Mexican goods.
Sadly, our new president has already executed his trademark Reverse Bluff — making trade barrier threats that, only he failed to realize, couldn’t be implemented — with savvy leaders in Canada, China and Europe, with similar results.
So, it seems that our president has now become the cartoon character that draws a succession of chalk lines across a road only to watch his nemesis immediately step over each one. The other leaders aren’t mocking him; they’re managing him. But, still, he’s failing at his objectives, humiliating himself and us, and ominously undermining the credibility of the presidency of the United States.
Matt Gold is an adjunct professor of Law at Fordham University, and the former deputy assistant U.S. Trade Representative for North America.
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