President Trump: Mexican Standoff


https://businessfacilities.com/2017/01/president-trump-mexican-standoff/
The Dealmaker-in-Chief blows up his first really big negotiation.

Mexican Standoff

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Mexican Standoff

The Dealmaker-in-Chief blows up his first really big negotiation.

The term “Mexican standoff” has been part of our colloquial lexicon for more than a century. Dictionaries benignly define it as “a confrontation between two or more parties in which no participant can proceed or retreat without being exposed to danger.”

Donald Trump MexicoNobody’s sure which 19th-century conflict spawned the phrase, but dozens of Hollywood action flicks have embedded the scenario in the frontal lobe of our culture, perhaps most memorably in Quentin Tarantino’s Reservoir Dogs, which climaxes with its four protagonists facing off against each other, each aiming loaded guns. After a few tense minutes, they end up shooting each other.

In the movies, “Mexican standoffs” usually end badly. In real life, when nation-states engage in these types of conflicts, cooler heads often prevail and the penultimate showdown is averted. But none of us should ever forget that the only reason we’re here to read this is because, in October 1962, an all-out nuclear war was avoided when two superpowers went eyeball-to-eyeball in the waters off Cuba and one of them blinked moments before the Doomsday Clock could tick off the final seconds to Armageddon.

In his first week in office, President Donald Trump has created a Mexican standoff that actually involves Mexico, a showdown that has the potential to produce a very bad ending for a peaceful, friendly, strategically important and symbiotically prosperous relationship that has existed for the better part of a century between two nations that share a 1,900-mile-long border. (If that’s not enough to get your attention, we’ll note that this dispute also may severely limit the munchies and beverage options for all of our Super Bowl parties).

If you missed the opening scenes of this B-movie-in-the-making, here’s a synopsis.

In the campaign that resulted in his election as our 45th president, Trump alternated between bellicose rhetoric aimed at our southern neighbor and soothing assurances that he, as the self-described world’s most-skillful negotiator, would get a better “deal” out of Mexico.

Trump began his campaign by gliding down the escalator at Trump Tower, stepping up to a microphone in front of two American flags and declaring that the U.S. would build a wall—estimated cost: a minimum of $20 billion—on its border with Mexico “and Mexico will pay for it.” Trump said the new wall would stop what he described as a tidal wave of millions of criminals (he called them “killers and rapists”) and tons of illegal drugs that, according to Trump, have been and currently are streaming across the border and flooding into the U.S. from Mexico.

During the campaign, Trump proclaimed that he would establish a “Deportation Force” to round up and send back to Mexico an estimated 12 million undocumented Mexican immigrants illegally living in the U.S. (most of whom have lived and worked in America for decades, including the parents of children born in the U.S.). And Trump said he would renegotiate or abandon the North American Free Trade Agreement (NAFTA, enacted in 1994), which he said has enabled Mexico to “steal” hundreds of thousands of U.S. manufacturing jobs.

Lest we forget, candidate Trump also questioned whether Americans of Mexican heritage should be trusted to serve as public officials in the U.S., including (and especially) a federal judge who was presiding over a civil trial involving allegations of consumer fraud at Trump University, which offered curricula in real-estate studies—supposedly imbued with the expertise of the iconic developer who bankrupted a bevy of casinos in Atlantic City—and issued “diplomas” for an average “tuition” of $25,000 to hundreds of its customers.

A few days before the November election, the bipolar opposite of this emerging Bully-in-Chief appeared in the form of the Dealmaker-in-Chief, a character who masterfully ushers adversaries to his negotiating table, brilliantly crafts a reasonable compromise and elegantly persuades all parties to sign on the dotted line and shake hands as respected business partners. The Dealmaker-in-Chief iteration of candidate Trump made a startling cameo appearance at a hastily convened meeting in Mexico City with President Enrique Pena Nieto of Mexico, emerging to tell the world that the meeting was “beautiful” and that he and Nieto were now “good friends” who would work well together.

A few days after the election, President-elect Trump briefly flashed his Dealmaker-in-Chief mojo by quietly letting it be known that he had magnanimously settled the Trump University fraud suit, reportedly by agreeing to pay the plaintiffs $25 million in compensation for services not rendered. The president-elect also seemed to soften his position on the border wall, hinting that U.S. taxpayers would foot the bill for the initial phases of its construction, which he wanted to begin this year, but assuring us that the U.S. would be fully reimbursed by Mexico after upcoming negotiations secure Mexico’s agreement to pay for the wall.

Then Trump took the Oath of Office on Jan. 20 and declared in his Inaugural Address that he would “right here and right now” bring an end to “the carnage” being inflicted on America by foreign countries (leaving no doubt that Mexico is at the top of his carnage-ending to-do list).

Here’s what happened this week:

  • A delegation of Mexican diplomats arrived in Washington to meet with Trump Administration officials to prepare for President Nieto’s scheduled visit to the White House next week to meet with President Trump.
  • As the Mexican diplomats were getting ready to start this dialogue with their American counterparts, President Trump signed an Executive Order declaring that construction of the wall between the U.S. and Mexico was to commence immediately.
  • Yesterday, at sunrise, President Trump tweeted that if President Nieto would not agree in advance that Mexico would pay for the border wall, than perhaps next week’s summit meeting of the two presidents at the White House should be canceled.
  • Around lunchtime yesterday, President Nieto tweeted that he was canceling next week’s meeting with President Trump, declaring that Mexico would not pay for the wall (in poker parlance, this is known as calling your opponent’s bluff).
  • About an hour later, President Trump’s press secretary, Sean Spicer, announced that the president was planning to impose a 20-percent tariff on all of Mexico’s exports to the U.S. and to use revenue generated by this new tariff to pay for construction of the border wall.
  • After a two-hour media feeding frenzy broadcasted the general outcry over Trump’s threat—during which at least one expert in Constitutional Law pointed out that the president doesn’t have the authority to impose tariffs, a power that resides in Congress—a bewildered Spicer appeared in the White House press room to inform the media that his earlier statement had been misinterpreted. He now said that the 20-percent tariff was just one of many “proposals” under consideration by the Administration.
  • Around dinnertime, President Trump tweeted that he and President Nieto had “mutually agreed” to cancel next week’s summit meeting.
  • In an impromptu interview with several White House correspondents who unexpectedly encountered the president as he strolled the corridors of the West Wing last night, Trump implied that the aforementioned 20-percent tariff would apply only to goods produced in Mexico by U.S. companies and shipped into the U.S. When asked where the money to build the wall would come from after these companies move those jobs back to the U.S. as Trump has demanded, the president abruptly ended the conversation.
  • As this is being written, the White House has announced that President Trump and President Nieto had a telephone conversation this morning. The announcement did not indicate which president had initiated the call, but Trump later insisted the conversation was “very, very friendly” and that the two men still have “a great relationship.”

While we all grab a six-pack of Dos Equis and wait for the next episode of this reality TV farce starring the new Most Interesting Man in the World (hoping it doesn’t turn into a tragedy), here’s a quick reality check:

  • The bellicose rhetoric that Trump has spewed about Mexico since the beginning of his campaign has been based on what we’ll politely call falsehoods and grotesque exaggerations (what the Trump team would like you to call “alternative facts”).
  • The flow of illegal immigration by Mexicans into the U.S. has slowed to a trickle in recent years, as Mexico’s economy has dramatically expanded, providing Mexicans with ample opportunities for employment in their own country.
  • Mexico is America’s third-largest trading partner, with nearly $600 billion worth of goods going in both directions across the border, supporting hundreds of thousands of jobs in both countries. (Yes, there is a trade deficit of about $58 billion currently in Mexico’s favor, but annual U.S. exports to Mexico now total more than $270 billion).
  • While NAFTA has indeed induced several major U.S. manufacturers to build assembly plants in Mexico that utilize low-wage workers, it also has spawned an interconnected hemispheric supply chain that supports thousands of jobs in the United States, including parts suppliers and most of the design, engineering and more advanced manufacturing required by the industry giants that have outsourced some of their assembly work to Mexico.
  • Millions of tons of agricultural products move both ways across the border, to the benefit of farmers, ranchers and consumers in both countries.
  • The notoriously violent drug cartels now wreaking havoc in Mexico moved into that country after the U.S. and Columbia successfully pushed them out of Columbia. In both cases, the largest market for these drugs always has been America.
  • Mexico’s cooperation is essential not only to the ongoing war on the drug cartels—a fight that has killed more than 50,000 people (including a lot of innocent civilians) in Mexico—but also in our global war on terrorism. An all-out trade war may transform Mexico from a vital strategic ally of the United States into a hostile power on our border who may not lift a finger to keep the really bad guys from getting into the U.S.
  • Trump’s threats, if enacted, will devastate the Mexican economy and propel a tsunami of desperate people to migrate to the U.S. border and to try to cross it any way they can. A 1,900-mile, 20-foot-tall barrier is a project on the scale of the U.S. Interstate Highway System, which took 30 years to complete. Anybody want to venture a guess on how many people can sneak across the border while the Great Wall of Trump rises in the Southwest?
  • A border wall will dismember several thriving “bi-national” economic development zones New Mexico and Texas have set up with sister cities on the other side of the border.
  • Any tariff on goods produced in Mexico and shipped to the U.S. will be collected from the wallets of U.S. consumers who buy those goods at much higher prices. Prepare to shell out an extra $10 for that bowl of guacamole dip, football fans.
  • Mexico undoubtedly will retaliate by slapping an identical tariff on the $270-billion haul of goods U.S. companies (and farmers) annually are shipping to Mexico, making their products unaffordable to the average Mexican or to Mexican manufacturers who use U.S.-made parts. The loss of these U.S. exports will cause thousands of U.S. workers to lose their jobs when exporters scale down their production.

That’s only a small portion of the real carnage that may result from the fight President Trump has started with Mexico by bloviating about the “carnage” he sees in his alternative universe.

If this is what The Art of the Deal really looks like, the only artistic technique it reminds us of is the one used by Jackson Pollock, the famous abstract painter who would stand a few feet away from his easel and hurl paint splatters at it. At least Pollock seemed to have had a method to his madness; many people consider his paint-splattered works to be masterpieces.

If President Trump continues to hurl invective at his deal-making canvas, the results will not be pretty and nobody will call it art. Unless the legendary negotiator of Trumpian mythology quickly reappears, repairs the damage and closes a reasonable deal with Mexico—sooner rather than later—what ends up hanging on America’s wall will be a gigantic and very dangerous mess.

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