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Trump misses NAFTA deadline as trade policy flounders

WASHINGTON - President Donald Trump on Thursday missed House Speaker Paul Ryan's deadline for a new North American trade deal, cast doubt on prospects for averting a trade war with China hours before meeting a top Chinese official, and bragged about his negotiating skills.

All in all, it was just another day in the president's ongoing effort to remake U.S. trade policy.

On Capitol Hill, the Republican-controlled House Appropriations Committee rebuked Trump by amending an annual spending bill to bar the Commerce Department from easing a ban on Chinese telecom giant ZTE doing business with U.S. suppliers as the president had ordered earlier this week.

The panel's action on a must-pass bill was the latest sign that Trump's breakneck bid to put "America First" is exasperating his congressional allies, as well as spooking business leaders and forcing the White House to defend repeated policy shifts.

The resulting chaos is alienating U.S. partners in Europe and Asia while calling into question Trump's ability to deliver on a core pledge to rebalance U.S. trade policy to benefit American workers.

After 16 months of feverish activity and white-hot rhetoric, the president has a modest overhaul of a South Korean trade deal and stepped-up enforcement of U.S. trade laws to his credit. Yet so far, a promised rewrite of the 1994 North American Free Trade Agreement and a recalibrated economic relationship with China have eluded him.

At the White House, Trump questioned this week's talks with a visiting Chinese negotiating team. "Will that be successful? I tend to doubt it. The reason I doubt it is because China has become very spoiled" with the status quo on trade, the president said.

"Trade has been a total one-way street," Trump added. "We had nobody representing us and now you have somebody who's very good at this stuff - me - representing us."

Speaking in the Cabinet Room, Trump castigated allies and adversaries, saying that the European Union has been "terrible" to the United States on trade, and complaining: "We have been ripped off by China."

On the day that Ryan last week set as the deadline for the United States to announce a new North American trade deal that Congress could vote on this year, the president's scattershot approach and divided negotiating team were on full display.

His White House comments came hours after an administration turf war burst into public view with reports that Treasury Secretary Steven Mnuchin and White House adviser Peter Navarro had engaged in a profane shouting match during an official trip to Beijing.

The intramural spat clouded prospects for negotiations with a visiting high-level Chinese delegation led by Vice Premier Liu He, who met with Trump following talks with Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer.

Beijing will offer to buy $200 billion in U.S. goods to meet the president's demand for a sharp reduction in the U.S. trade deficit with China, according to a report in the New York Times, which said economists were skeptical the plan could be implemented.

But the Chinese talks were far from the only trade-related items on the administration's agenda. Elsewhere, officials pursued fading hopes for a new NAFTA amid contradictory assessments of the talks' progress.

In New York, Canadian Prime Minister Justin Trudeau said negotiators were close to a deal, adding "I'm feeling positive about this."

But in a tweet, Mexico's Economy Minister Ildefonso Guajardo quickly doused any notion that a deal was close, calling "unacceptable" any agreement that resulted in the loss of Mexican jobs.

And Lighthizer on Thursday evening issued a notably downbeat statement, saying negotiators were "nowhere near close to a deal" and citing "gaping differences" on several issues.

The United States has nearly one-half of its $3.9 trillion goods trade at stake in the NAFTA and China talks. Yet, the president appears prepared to add to the uncertainty for businesses by moving closer to a fight with the European Union and Japan over steel and aluminum tariffs, scheduled to take effect June 1.

"At this level of activity, there really is a bandwidth issue," said William Reinsch of the Center for Strategic and International Studies, a former Commerce Department official in the Clinton administration.

Thursday, Ryan softened his earlier stance that lawmakers needed the text of a NAFTA agreement to comply with a mandatory legislative schedule, saying that the administration might have "two more weeks to get a deal" if the International Trade Commission accelerated its required review of any proposed agreement.

"They've got a full agenda, some of which has been inflicted on them by their own actions," said Carla Hills, who served as chief trade negotiator for President George H.W. Bush.

The absence of a conventional White House policy process also is hobbling the president's hopes for a trade revolution. Since Rob Porter, the former White House staff secretary, resigned in early February, the weekly Tuesday meetings he convened have often been canceled, several business executives said.

In Porter's absence, officials on both sides of the administration's globalist vs. nationalist fault line have struggled to maintain a coordinated stance.

The president often has gone public with proposalsbefore the bureaucracy has laid the groundwork with legal analyses and supporting material, Reinsch said.

On Sunday,the president left even his closest supporters baffled by his calls for the Commerce Department to relax penalties on ZTE, which had illegally traded with Iran and North Korea. "Too many jobs in China" would otherwise be lost, tweeted Trump, who campaigned on a promise to put American jobs first.

"Now it's all backward," Reinsch said. "Policy is announced in a tweet and then the lawyers have to run around afterward and make arguments for why he can do what he wants to do."

The disorganization has been apparent to business executives. "There is very little coordination within the administration and between the administration and Congress," said attorney Dan Ujczo of Dickinson Wright. "Companies are advising other administration officials of what they hear from other departments, and it's as if those officials are hearing it for the first time."

Lighthizer defended the president's approach at a U.S. Chamber of Commerce event earlier this month.

"He has very strong views," Lighthizer said. "It's an interesting process to watch and it's really a very solid way to make decisions."

The mammoth workload has been aggravated by a shortage of senior trade staff. Lighthizer joined the administration four months after Trump was sworn in, and it took Congress until March to confirm four of his top deputies. The Commerce Department lacks permanent assistant secretaries for its enforcement and global markets divisions.

The personnel shortage has hampered policy rollouts. In March, it took 10 days after Trump's announcement of steel and aluminum tariffs for Commerce to announce a process for companies to seek waivers - which it did in an 11 p.m. Sunday post on the department website.

Confusion over the president's trade agenda has been evident this week on Capitol Hill, where lawmakers puzzled over the meaning of Thursday's NAFTA deadline and the administration's failure to meet it.

Sen. Jeff Flake, R-Ariz., a frequent Trump critic, accused the president of "chaotic diplomatic improvisation" in his trade policy.

Even as House Ways and Means Chairman Kevin Brady, R-Texas, and other Republican leaders offered public support for a new NAFTA deal, other lawmakers questioned privately whether Congress would pass one.

Since Trump took office, Republican senators have pressed him to back off on his protectionist agenda. Yet when Trump joined GOP senators at the Capitol for their weekly lunch Tuesday, no one pressed him on the topic, with several lawmakers effectively admitting failure on that score.

"What's driving our frustration, obviously, one, it's very hard to determine what our trade policy is, other than getting a better trade deal. That's pretty amorphous," Sen. Pat Roberts, R-Kan., chairman of the Senate Agriculture Committee, said in an interview Wednesday.

Despite public support for a NAFTA overhaul, some House Republicans are privately relieved that they are unlikely to confront a new trade agreement in 2018. Many believe it would be a heavy lift for Congress to grapple with in an election year.

  

Story by David J. Lynch. Lynch is a staff writer on the financial desk who joined The Washington Post in November 2017 after working for the Financial Times, Bloomberg News and USA Today.

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