Donald Trump’s WTO threat shows he is becoming predictable

31 August 2018 12:45 PM

The obvious reaction to Donald Trump’s threat to withdraw the US from the World Trade Organisation (WTO) is that it isn’t exactly going to help the Brexiteers’ cause. For months they have been arguing that everything will be okay in the event of a ‘no deal’ Brexit – we will simply trade under WTO rules. And then comes along the leader of the world’s largest economy and says he wants out of that organisation, threatening its existence, or at least its position as the undisputed arbiter of global trade.

But then another thought springs to mind, with even more severe repercussions for the world: Donald Trump is becoming predictable. We have seen it with North Korea, steel and aluminium tariffs, the UN, you can sense it with Iran and it wouldn’t surprise me if it eventually happens with climate change as well. Trump’s modus operandi is to throw a very large spanner in the works of international organisations and agreements, shock everyone, act the isolationist and then, when everyone has given up on him, to come to the table eager to do a deal.  

The first time, with North Korea, it came across as an inspired strategy. The threats to Kim Jong un reminded the dictator that he wasn’t going to win a battle – even a political one – with the US. In fact, it would be highly dangerous to do so because Trump seemed so unpredictable and trigger-happy. Then, along came Trump and offered him a way out – which boosted rather than diminished his ego – and he seized it. Trump ended up looking a great man of peace.

The trouble with Trump’s shock tactics, however, is that the shock wears off. It is hard to believe that Trump really wants to leave the WTO. Yes, the US loses nine out of 10 cases where other countries complain to the WTO about US behaviour.   But then the US also wins nine out of 10 cases where it is the complainant. Does Trump really want to throw away its legal recourse when other countries dump goods, jack-up tariffs and block entry to US exporters? I would guess not. What Trump really wants is to create a big stir, threaten to undermine the world’s trading system – and then come riding through the mist as the man who saved it.      

To understand Trump you have to realise that he has an even bigger Messiah complex than Al Gore – and that is saying something. For Trump, pocketing a Nobel Peace Prize would be akin to winning a goldfish at the fair – nice enough, but it wouldn’t satisfy him for long. He doesn’t mind offending people, but ultimately he wants a great big place in history. He wants to be one of those faces carved into Mount Rushmore, only three times the size of the others.

The best way for other world leaders is to humour his ego. Let him go away thinking he has personally saved the world’s trading system. The only regret is that his threat to exit the WTO won’t be taken seriously enough and so will not create an opportunity to reform world trade in the way the barking at Kim Jong un reformed North Korea’s relations with the world. But as for Brexit, I wouldn’t worry too much – the WTO will continue to be a fallback for UK-EU trade – even though a deal is still far preferable.