Trump is wimping out on trade

During the campaign, Donald Trump talked loudly and often about how he was going to renegotiate the United States’ “horrible trade deals,” bringing back millions of good jobs. So far, however, nothing has happened.

So on Friday the White House scheduled a ceremony in which Trump would sign two new executive orders on trade. The goal, presumably, was to counteract the growing impression that his bombast on trade was sound and fury signifying nothing.

Unfortunately, the executive orders in question were, to use the technical term, nothingburgers. One called for a report on the causes of the trade deficit. The other addressed some minor issues of tariff collection, and its content apparently duplicated an act President Barack Obama already signed last year.

Not surprisingly, reporters at the event questioned the president, not about trade, but about Michael Flynn and the Russia connection. Trump then walked out of the room—without signing the orders. (Vice President Mike Pence gathered them up, and the White House claims that they were signed later.)

The fiasco perfectly encapsulated what’s looking more and more like a failed agenda.

Business seems to have decided that Trump is a paper tiger on trade: The flow of corporate relocations to Mexico, which slowed briefly while CEOs tried to curry favor with the new president, has resumed.

Investors seem to have reached the same conclusion: the Mexican peso plunged 16 percent after the election, but since Inauguration Day it has recovered almost all the lost ground.

Oh, and last week a draft proposal for revising the North American Free Trade Agreement circulated around Congress; instead of sweeping changes in what candidate Trump called the “worst trade deal” ever signed, the administration appears to be seeking only modest tweaks.

Why can Trumpist trade policy be summarized—to quote The New York Times’ Binyamin Appelbaum—as “talk loudly and carry a small stick”? Let me give two reasons.

First, back when Trump was railing against trade deals, he had no idea what he was talking about. For example, listening to the Tweeter-in-chief, you’d think that NAFTA was a big giveaway by the United States, which got nothing in return. In fact, Mexico drastically cut its tariffs on goods imported from the U.S., in return for much smaller cuts on the U.S. side.

Talking nonsense about trade didn’t hurt Trump during the campaign. But now he’s finding out that those grossly unfair trade deals he promised to renegotiate aren’t all that unfair.

Which brings me to Trumptrade’s second big obstacle: Whatever you think of past trade agreements, trade is now deeply embedded in the economy.

Consider the case of automobiles. At this point it makes little sense to talk about a U.S. auto industry, a Canadian auto industry or a Mexican auto industry. What we have instead is a tightly integrated North American industry, in which vehicles and components crisscross the continent, with almost every finished car containing components from all three nations.

Economists talk, with considerable justification, about the “China shock”: the disruptive effect on jobs and communities of the rapid growth of Chinese exports from the 1990s through 2007. But reversing globalization now would produce an equally painful “Trump shock,” disrupting jobs and communities all over again—and would also be painful for some of the big corporate interests that, strange to say, have a lot of influence in this supposedly populist regime.

Governing America isn’t like reality TV. A few weeks ago Trump whined, “Nobody knew that health care could be so complicated.” Now, one suspects, he’s saying the same thing about trade policy.•

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Krugman is a New York Times columnist. Send comments to ibjedit@ibj.com.