The Art Of The Deal - Extortion

Mike Pompeo's confirmation as Secretary of State has been no sure thing ever since Trump announced his nomination. Rand Paul, at least for his opening negotiating position before his probable cave, is saying he is a no vote based on Pompeo's previously hawkish and interventionist views. That no vote could result in the Senate Foreign Relations Committee not even voting to send Pompeo's nomination out of committee, a move that will certainly be a black mark for Pompeo but not necessarily block the full Senate from taking up his nomination.

With that as a backdrop, it was interesting to see the Washington Post report and the President confirm that Pompeo had made a secret trip to North Korea to meet with Kim Jong-un over the Easter weekend. The trip came just days after Pompeo's nomination. Now, it is not totally out of the ordinary to send the CIA director on a secret diplomatic mission, but it does seem a little odd to send a nominated but not yet confirmed Secretary of State.

But leaking the fact that Pompeo was already involved in the North Korean negotiations was clearly designed to put pressure on Paul and red state Democrats to vote for Pompeo. Voting against Pompeo would not only deny the President his theoretically qualified choice for a senior cabinet position but it actually puts Senators in the position of voting to potentially disrupt the ongoing negotiations with the North Koreans. That pressure seemed to work when Heidi Heitkamp announced that she would vote to confirm Pompeo, virtually guaranteeing his confirmation if the nomination does make it to a full Senate vote. Admittedly, this is kind of an easy vote for Heitkamp and other red-state Democrats to take in order to illustrate their independence going into the fall election. But it is also clear that the secret North Korean negotiations created additional pressure.

It appears that the renegotiation of the NAFTA agreement may be reaching a conclusion in the next month or so. All parties agree that real progress has been made with over 80% of the outstanding items having been agreed to and the difficult auto issue the last remaining obstacle. To be sure, there are still potential issues both on the auto issue and on labor reform in Mexico that could still scuttle the deal. But, even if the new agreement does get finalized, it also appears that the final deal may not be the winning moment that Trump has long promised.

Politico reports that the Trump administration currently favors withdrawing from the existing NAFTA agreement before this new, renegotiated deal is signed. The rationale behind this move is that there is a fear that pro-trade Republicans will refuse to vote for the renegotiated deal and simply leave the existing NAFTA deal in place. By withdrawing from NAFTA, Trump is presenting the Senate and a large bloc of his own party with a choice between his new deal and no deal at all. To a lesser degree, that same pressure could possibly effect Democrats reliant on union support.

What both these stories indicate is that Trump primarily relies on one tactic when he is negotiating and that is some form of extortion. Now, a President strong-arming Congress for votes has a long tradition. But, as LBJ demonstrated, presidents usually get more mileage by engaging in some sort of horse trading, providing certain benefits for the legislator's district in return for a specific vote. This is a tactic that Trump seems incapable of engaging in.

In fact, both these stories illustrate the problem with Trump's tactic of governing by extortion. It was reported that a number of Senators on the Foreign Relations Committee were annoyed by the fact that Pompeo had kept his trip to North Korea secret in their private conversations with the nominee. That fact alone will probably not change a single vote but it created unnecessary ill will for the nominee.

The reaction from Congress on the plan to withdraw from NAFTA sparked even greater outrage. When the plan was laid out to Paul Ryan, he challenged the US Trade Representative Robert Lighthizer, saying, "Bob, how many FTAs [free trade agreements] have you passed." Lighthizer is reported to have come across to important Congressional leaders such as Ways and Means chairman Kevin Brady as arrogant and dismissive of Congress' and Republican concerns, saying that he only had "an audience of one", namely the President. Said one Congressional source, "if you think a new NAFTA is better than no NAFTA you don’t think about a whip operation until the end. It’s all about the dynamic. The threat of withdrawal hovers over everything."

We have seen this same aggressive extortionist strategy backfire repeatedly for Trump. His threat to destroy Obamacare in order to bring Democrats back to the table to negotiate a new health plan ended up wasting the first and most important year of his presidency. Trump's plan to kill DACA in order to get Democrats to fund his border wall similarly ended in failure when Democrats refused to give him something (his border wall funding) for essentially nothing (restoration of DACA). Trump has only been saved from disaster because the courts have ruled his suspension of DACA unlawful but his actions have motivated the Democratic base.

A similar disaster seems to be looming for NAFTA. There will be winner and losers from the renegotiated deal and some, if not many, of those losers will be Republican districts. Forcing Republicans from those districts to vote for the new NAFTA could be problematic with a potential blue wave coming in the fall. Worse, passing the new NAFTA that hurts certain GOP districts by relying on Democratic votes will outrage the Trump base even more.

Now, I have no doubt that Rand Paul will eventually cave on Pompeo just like he did on Obamacare repeal. And I have no doubt that virtually all of the Republicans in the Senate will cave on NAFTA. Where Trump's penchant for extortion can and has created real damage is in the foreign policy arena.

Trump's unnecessary attacks on Mexico and even Canada have only made renegotiating NAFTA more internally politically difficult for the leaders of those countries. Trump's tariffs have already started a low-grade trade war with China as well as angering the Europeans before Trump caved and offered them exemptions. French President Macron's response to the original announcement of the steel and aluminum tariffs was "We will discuss nothing, as a matter of principle, with a gun pointed at our head".

This is how Trump negotiates with our friends. So we shouldn't hold out much hope for Trump's face-to-face meeting with Kim Jong-un. It seems clear that part of Kim's strategy is to drive a wedge between South Korea and the US. Formally ending the Korean War and discussing denuclearization, by which the North means agreeing to renounce first use, a test ban on the entire Korean peninsula, and not transferring their nuclear technology, not a dismantling its own program, are designed to appeal to the South. But Trump's extortionist and unilateral threats to withdraw from the Iran nuclear deal have already reduced the chances that the North Koreans will actually agree to any deal to dismantle their program. And if Trump's talks fail, especially if it is seen to be because of Trump's one-sided demands, the rift between the US and South Korea will grow even wider and it will end up further empowering and emboldening Kim.

Donald Trump has endured six bankruptcies in his checkered career. Part of the reason for that extraordinary  record of failure is that, for Trump, the art of the deal is basically extortion. And most business built on extortion usually can't last very long. In the end, that may be true of the Trump presidency.