Technology & Trade

Dealing with the Devil?

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By William Reinsch

We swamp dwellers were surprised over the past two weeks to see the president confound his own party and make a deal with the Democrats on temporarily funding the government and raising the debt limit and then entertain deals on tax reform and DACA. There has been a lot of speculation about what all that means, if anything. I have spent some time thinking about that too, particularly pondering the question of whether it has any significance for trade policy. I am no more sure of my answers than anybody else, but I’ll offer a few thoughts anyway.

First, there is always with Trump the possibility that these were impulsive decisions that signify nothing about the future. In the first case, he saw a deal that, if nothing else, solved some serious short-term problems (albeit only for the short-term) and allowed him to avoid getting sucked further into a messy partisan debate that wouldn’t end until something was cobbled together at midnight September 30. Sometimes, as Freud said, a cigar is just a cigar, and we should leave it at that.

Of course, this being Washington, which is full of people who make their living pontificating, it can’t just be a cigar; it has to be fraught with greater meaning. The main interpretations seem to be either that he was “punishing” congressional Republican leaders for their failure to move his agenda or that he was reminding everybody that he is not a traditional Republican but instead is a disruptor intent on draining the swamp on behalf of his base, which is not all ideologically Republican. Or both. Or neither.

Lost in that debate and in the argument over who won (the Democrats?) and who lost (the Republican leadership?) is the possibility that these may be smart decisions on their merits. The budget deal provided relief for Harvey quickly and efficiently; it prevented at least 50 news stories about what it would mean if the U.S. defaulted on its debt (something that Trump presumably knows about from personal experience); and it postponed the down-to-the-wire panic about a government shutdown. 

In addition, it and the two episodes that followed unquestionably sent a signal that he is prepared to cross the aisle and make a deal if he finds a better one over there. More than anything else, that should worry Republican leaders who have religiously followed the doctrine of excluding the other party from all important decisions, even when it was obvious they couldn’t hold their own troops together.  (To be fair, the Democrats were guilty of exactly the same thing when they were in the majority.)  And to my mind, it’s a good thing if they’re worried. There have always been two ways to run the House — by the majority party keeping its people in line and excluding the minority, essentially a parliamentary system—  or from the center with both parties working together and each throwing their fringe elements over the side. The latter used to be the norm, but for the past 25 years the former has generally prevailed, and everyone can see the gridlock it has produced. Trump ran against gridlock, and, deliberately or accidentally, he has actually struck a blow against it. Party leaders now have to decide whether to continue with business as usual or learn from these episodes.

Obviously, questions remain. Will this turn out to be a one-off or the first steps in a consistent pattern? Will he try to bludgeon his new Democratic friends into a DACA reprieve in return for the wall (not so far) or get them to buy into supply side-based tax reform? Will the Democrats overplay their hand and demand too high a price? Will the leaders in both parties take the hint and change the way they do business with each other (when pigs fly)? In other words, this could all crumble into nothing, but there is potential here for changing the conversation, and it will be interesting to see if the parties are brave enough to do it.

And, finally, does this mean anything for trade policy? Maybe, but not in the way one would expect. The appeal of the president’s trade policy crosses party lines, so it might seem a natural place for the two parties to work together, but that will be hard — particularly for the Republican leadership — because it attracts the extremes of both sides rather than the center. Instead of bringing the center together for a common cause it would drive it farther apart. It would, however, let the two parties practice working together, and that may be so important to the stability of our political system that it is worth looking at even if we know in advance it’s going to produce a bad policy. 
William Reinsch is a Distinguished Fellow with the Stimson Center, where he works principally with the Center’s Trade21 initiative.

Photo: Meredith_Nutting


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