Fear: Trump in the White House

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.”