There are a number of candidates for the identity of the British military leader immortalised in a nursery rhyme as the “Grand Old Duke of York” who, having ten thousand men under his command, “marched them up to the top of the hill and marched them down again”. The most plausible to my mind is King James II, who had been the Grand and Old Duke of York before his unexpected accession to the throne in 1685. His brother, Charles II, fathered at least fourteen children, but not one of them a legitimate son.
In any case, James managed four years on the throne as a Catholic ruler before being deposed by his daughter Mary and her husband, William of Orange. On the occasion of William’s invasion of England, James marched his army to Salisbury plain near Stonehenge, planning to fight, before disbanding them and retreating to Ireland, where he would later lose at the Boyne. He marched them up, and he marched them right back down.
In any case, the rhyme itself is a mockery of indecision and bad leadership, with the over-riding message being that a good and decisive leader makes a decision and sticks to it. Which brings us nicely to the weekend’s announcement from the White House that President Trump intends to impose tariffs of 30% on all EU exports to the United States, plus an additional tariff equivalent to the amount of any retaliatory tariffs imposed by the European Union.
It is notable that this announcement, which really should be sparking panic in the markets, appears not at the time of writing to have done so. Earlier in the year, on the previous occasion when the President announced backbreaking tariffs on the whole world in order to address trade deficits that he feels are problematic, there was a pronounced market response, followed in reasonably short order by a climbdown by the White House, followed by insistence from some sectors of Trumpworld that the tariffs had only ever been a “negotiating tactic”.
On this occasion, the climbdown seems to be already baked in.
Over his first six months in office, the American President has acquired the nickname “TACO”, an acroynym for “Trump always chickens out”. Trump fans counter with the notion that the President stakes out extreme positions, demanding far more than he might ever hope to get, as one of the aforementioned negotiating tactics.
The problem of course with negotiating tactics is that for them to work, the other side ideally would not know that they are tactics. For them to work, it is generally preferable that the people across the table from you fully believe that you are deadly serious, and that if they do not come to a swift accommodation with you, you will in fact press the button or walk away as the case may be.
There have been other explanations for Trump’s behaviour from online and offline Trump-whisperers over the year, none of which have really held up: During the first effort at tariffs, a popular one was that Trump was deliberately depressing the markets in order to drive down bond yields on American debt and reduce the cost of borrowing. But bond yields – and the markets – went up long before any major US debt refinancing fell due, so that one proved inaccurate. Another theory was that Trump had succeeded and would swiftly sign an array of trade deals: Trump had promised over 200 of these by this point in his presidency, and thus far has signed three.
The final explanation is perhaps the most plausible: That when Trump has an uncomfortable problem of some kind or other, he has a habit of trying to do something dramatic to distract from it. At present, his administration is under significant domestic pressure from the right over its declaration that disgraced financier Jeffrey Epstein didn’t have clients buying sexual favours from his trafficked victims. And right on cue, Trump announced new dramatic tariffs and wondered aloud about stripping US citizenship from his long-term enemy…. Rosie O’Donnell.
None of this is to say that Trump has not been an effective negotiator in other fields, but where he has been successful, the threats have been credible. For example, on defence spending he has managed to leverage enormous new spending commitments out of NATO countries, in large because those countries really do believe that it’s possible that his administration might simply decline to defend an attacked NATO member. The threat is credible, and has never been tested. What’s more, the demand – what Trump wants – has always been clear. And thus, he succeeded spectacularly with NATO in a way he never has on trade.
The problem on trade is that nobody really knows what he wants. He does not appear to know himself: One minute, tariffs are good in and of their own right. Another minute, the tariffs can be negotiated away in return for a “good deal”, but the only definition of a “good deal” that is available is a deal whereby the other country buys more from America than America buys from them.
That kind of “deal” simply cannot be done with, for example, Ireland. There is no deal on the table that would reverse, or could possibly reverse, the US trade deficit with Ireland.
And as such, while the EU and Ireland both gave dutiful “we believe in free trade and we hope Trump doesn’t do this” reactions on Saturday, there is precisely zero sense of urgency in Dublin or Brussels that he actually will do it. One member of the Government, with whom I spoke at the weekend, simply said “nobody’s falling for it this time. We all know he’ll defer or back down and claim victory afterwards, and we’ll let him”.
He is, on tariffs, that modern day Duke of York. He marches his demands up to the top of the hill, and he marches them down again. There’s a reason William won that war, and James ended up in exile for eternity.
Loading ...