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What the Tea Leaves Tell Us About Trump’s Trade Agenda

Since taking office, his administration has shown signs both of hard edges and conventional stances (albeit sometimes with more public chest-thumping). Based on that evidence, here’s where Trump’s trade policy appears to be heading.

Brinkmanship on Nafta

Administration officials are signaling that they are willing to pull the United States out of the trade agreement with Canada and Mexico that has been the bedrock of North American commerce for nearly a quarter century. But do they mean it?

In late April, President Trump was apparently on the verge of signing an executive order that would have begun the process of exiting the agreement. He said later that he held off after phone calls from the leaders of Canada and Mexico urging him not to.

He also would have faced intense pressure if he had moved forward, including from agriculture interests, the auto industry and the broader business community. It would have raised thorny legal questions about the president’s authority, and faced blowback from Republicans in Congress.

But a hallmark of Mr. Trump’s negotiating style is to make big threats to try to force action. And Nafta has been a favorite target. As recently as late April he said that Nafta has been “very, very bad for our companies and for our workers, and we’re going to make some very big changes, or we are going to get rid of Nafta once and for all.”

In other words, don’t be surprised if he keeps using Nafta withdrawal as a cudgel to try to push renegotiation along.

“I don’t think that was the last time we’ll see that possibility get floated,” said Tim Keeler, a partner at the law firm Mayer Brown and an official in George W. Bush’s trade representatives’ office. “The president is clearly focused on doing Nafta renegotiation and doing it quickly. That typically would…

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