Are Trump's trade deals the real deal?

Summary

Podcast Summary: The Indicator from Planet Money
Episode: Are Trump's Trade Deals the Real Deal?
Release Date: May 29, 2025

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Introduction

In the May 29, 2025 episode of The Indicator from Planet Money, hosts Waylon Wong and Darian Woods delve into the efficacy of trade deals orchestrated during the Trump administration. Titled "Are Trump's Trade Deals the Real Deal?", the episode critically examines whether the agreements touted by Trump officials genuinely establish substantial economic partnerships or merely serve as superficial pacts designed to placate international tensions.

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Trump Administration's Trade Deal Push

The episode opens with a spotlight on the Trump administration's aggressive approach to trade negotiations. Officials like trade advisor Peter Navarro and economic advisor Kevin Hassett prominently boasted about orchestrating multiple deals under high-pressure timelines. Navarro proclaimed the intent to "run 90 deals in 90 days" (00:12), while Hassett highlighted monumental agreements such as "cutting trillions of dollars of deals with our Middle Eastern friends" (00:30). These declarations set the stage for evaluating the substance behind these announcements.

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Wendy Cutler: A Veteran Trade Negotiator

To provide an expert perspective, the hosts bring in Wendy Cutler, a seasoned trade negotiator with 35 years of experience in crafting U.S. trade agreements. Currently affiliated with the Asia Society Policy Institute, Cutler offers invaluable insights into what constitutes a meaningful and durable trade deal. She emphasizes the importance of controlling emotions during negotiations, noting, "a sign of a good negotiator is someone who controls their emotions" (02:36).

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Three Hallmarks of a Proper Trade Deal

Cutler outlines three critical components that she believes are essential for a robust trade agreement:

1. Commitments

   • Definition and Importance: Cutler asserts that effective trade deals contain explicit promises detailing what each country will do. "The more detailed, the more each side understands what they're expected to do," she explains (04:28).

   • U.S.-Korea Free Trade Agreement Example: Highlighting her experience, Cutler references the U.S.-Korea agreement, which encompasses comprehensive rules covering specific products and broader areas like intellectual property and labor.

   • Evaluation of Current Deals:

     • UK Agreement: Contrasted sharply with her standards, the UK deal spans a mere five pages, predominantly outlining intentions for future talks. Cutler critiques the prevalence of tentative language, stating, "We call this like a terms of reference agreement" (04:56).
     • China Agreement: Similarly, the U.S.-China deal suspends certain tariffs for 90 days without binding commitments. Cutler describes it as "a temporary truce" rather than a substantive agreement (05:16).

   • Verdict: Both agreements lack the definitive commitments Cutler deems necessary. "No deal," she concludes for both rounds (05:41).

2. Dispute Settlement Mechanism

   • Role in Trade Agreements: Cutler emphasizes that a robust dispute settlement framework incentivizes adherence to commitments. Without it, reliance on goodwill becomes the primary, often unreliable, enforcement mechanism (06:08).

   • Current Deal Assessments:

     • UK Agreement: Absence of a dispute resolution process.
     • China Agreement: No mechanisms outlined for handling disagreements, merely plans to negotiate further during the tariff suspension period.

   • Verdict: While dichiarate a deal, both are labeled "weak deals" due to the lack of effective dispute resolution provisions (06:15–07:13).

3. Congressional Involvement

   • Necessity for Durability: Cutler highlights the importance of consulting and involving Congress in trade negotiations to ensure legal backing and broader support. Historical agreements like the USMCA (which replaced NAFTA) required congressional approval, solidifying their legitimacy.

   • Current Situation:

     • UK and China Deals: These agreements circumvented congressional approval, with the executive branch solely steering trade policies.

   • Verdict: While technically constituting deals, their lack of congressional involvement raises concerns about their longevity and enforceability. "But I don't know how durable it is," Cutler remarks (08:13).

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Overall Assessment of Trump's Trade Deals

Integrating the evaluations across the three hallmarks, Cutler provides a comprehensive critique. She underscores that the UK and China agreements fall short of establishing meaningful and lasting trade relationships. "In order for a deal to be meaningful and durable, it needs to be a win-win agreement," she explains (08:59). The perceived coercion of the U.K. and China into these agreements—stemming from U.S. tariffs—could lead to future implementation challenges and strained international relations.

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Conclusion and Insights

The episode wraps up by reiterating the absence of substantive commitments, effective dispute mechanisms, and congressional endorsement in the Trump administration's trade deals. These shortcomings suggest that while agreements were reached, they may not possess the depth and resilience necessary for long-term economic collaboration. Cutler's analysis reveals a gap between the administration's assertive rhetoric and the tangible outcomes of its trade negotiations.

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Notable Quotes

• Wendy Cutler on Negotiation Tactics:
  "A sign of a good negotiator is someone who controls their emotions." (02:36)

• On the Importance of Detailed Commitments:
  "The more detailed, the more each side understands what they're expected to do." (04:28)

• Critique of the Current UK Agreement:
  "We call this like a terms of reference agreement." (04:56)

• On the Nature of the US-China Deal:
  "They announced plans to negotiate over the next 90 days during this truce." (06:57)

• Durability Concerns:
  "But I don't know how durable it is." (08:13)

• On Meaningful Trade Agreements:
  "In order for a deal to be meaningful and durable, it needs to be a win-win agreement." (08:59)

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Final Thoughts

The Indicator from Planet Money successfully dissects the complexities of international trade negotiations, leveraging expert insights to evaluate the Trump administration's trade deals critically. For listeners seeking to understand the intricacies behind high-profile trade agreements and their long-term implications, this episode offers a nuanced and informative exploration.

Transcript

[NPR Announcer]

Npr.

[Waylon Wong]

This is the indicator from Planet Money. I'm Waylon Wong.

[Darian Woods]

And I'm Darian Woods. We have been hearing so much talk from officials in the Trump administration about deal making. Like from trade advisor Peter Navarro, we're.

[NPR Announcer]

Going to run 90 deals in 90 days.

[Darian Woods]

Or Kevin Hassett, another economic advisor.

[Wendy Cutler]

Everybody has seen awesome deals that are on the table. You know, last week we were in the Middle east cutting trillions of dollars of deals with our Middle Eastern friends.

[Waylon Wong]

Awesome deals. Trillions of dollars of deals. 90 deals in 90 days. The Trump administration says the tariffs it's imposed or threatened to impose are bringing foreign governments to the negotiating table.

[Darian Woods]

The European Union this week said it's fast tracking trade talks with the US and the White House has already announced two deals with UK And China.

[Waylon Wong]

So there's been a lot of celebration. But what do these pacts actually involve? And are they really even deals? Today on the show, a former trade negotiator for the US Puts these agreements to the test.

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[Darian Woods]

To become a trade negotiator for the US Government. It's a learn by doing kind of job. That's according to Wendy Cutler. She's currently at a think tank called the Asia Society Policy Institute. Before that, she spent 35 years negotiating trade agreements for the U.S. these were often high pressure, complex situations.

[Wendy Cutler]

It can get very emotional and frankly, a sign of a good negotiator is someone who controls their emotions. Okay? So even if you get angry or you're frustrated, you don't let the other side see that unless you want them to see it or you want them to take away that you are so upset that you'll never agree to something so you always want to be in control. I've had counterparts who spent a lot of time trying to get under my skin and to get me to lose my temper.

[Waylon Wong]

And so really, they're playing little mind games with you in the room?

[Wendy Cutler]

Yes. Yeah, exactly. You know, things like if you spoke to your minister, you would know better than what you're saying now or accusing you of not knowing your brief or not listening.

[Waylon Wong]

Well, we're not here to play mind games with Wendy. That's not our style on the indicator. But we are here to play a game we call deal or no Deal.

[Darian Woods]

So here's how it's going to work. Wendy is going to tell us about three hallmarks of a proper trade deal. Three ingredients that she thinks should be part of a lasting and meaningful agreement. And then we'll have Wendy judge whether these components can be found in the deals that the White House has announced with the UK And China.

[Waylon Wong]

Wendy, are you ready to play deal or no deal?

[Wendy Cutler]

All good. Okay, whatever.

[Darian Woods]

Whatever. All right, so round one is something we're calling commitments. Wendy says that a good trade agreement has lots of language about what the countries promise to do.

[Wendy Cutler]

It was always, you shout, the party shall do this.

[Darian Woods]

And these commitments are detailed. Wendy worked on a free trade agreement with Korea that was hundreds of pages long. It had rules for specific products like popcorn or clothing made from corduroy. It also covered areas like intellectual property and labor.

[Wendy Cutler]

The more detailed, the more each side understands what they're expected to do. For example, if you have a chapter which goes through, these are the five areas where we are going to, you know, take binding commitments, that's worth a lot more than just generalities.

[Waylon Wong]

Contrast that kind of detail to what's in the current UK Agreement. That deal is a slim five pages long and mostly sets the stage for future talks.

[Wendy Cutler]

The word intend is scattered throughout the text, meaning we intend to talk about this. We intend to work on this. In the trade world, we call this like a terms of reference agreement. You're setting up the terms for a.

[Waylon Wong]

Future negotiation like a pre deal before the real deal?

[Wendy Cutler]

Exactly, exactly.

[Darian Woods]

The U.S. china deal is similar. The two sides agreed to suspend some tariffs for 90 days. But it's a temporary truce, not a binding commitment. And like in the UK Agreement, the two countries said they will keep talking.

[Waylon Wong]

Okay, so, Wendy, in this first round deal, commitments are part of the text or no deal. It's more intent than commitment.

[Wendy Cutler]

No deal.

[Waylon Wong]

Ooh, ooh.

[Darian Woods]

No deal.

[Waylon Wong]

No deal. Okay, so for round one commitments, no deal. Now onto the second hallmark. Of a proper trade deal. We're calling this round dispute settlement.

[Darian Woods]

Wendy says the trade deals she negotiated would typically include a chapter on what to do if there were future disagreements. For example, if one country believed another was violating the terms of the deal.

[Wendy Cutler]

It provides a real incentive to live up to your commitments. If there's no dispute settlement, then frankly, you're depending on the goodwill of the other to live up and adhere to what they agreed to.

[Waylon Wong]

And Wendy says she has worked on trade agreements that didn't have a mechanism for settling disputes. But again, a meaningful trade deal is one that clearly lays out the rules of the game when it comes to.

[Darian Woods]

How the UK Deal handles disagreements.

[Wendy Cutler]

Yeah, you see? No dispute settlement mechanism.

[Darian Woods]

Ok, so for the UK on dispute settlement, deal or no deal?

[Wendy Cutler]

Deal. But weak deal.

[Darian Woods]

Better.

[Waylon Wong]

Ooh, weak deal. Okay, then there's China. This deal doesn't talk about how the two sides will work out disagreements either. It just calls for a partial truce in the current trade war.

[Wendy Cutler]

They announced plans to negotiate over the next 90 days during this truce. And. And I'm not saying the process isn't important. It is important, and de. Escalating tensions is important.

[Waylon Wong]

All right, so for China on dispute settlements, Wendy, deal or no deal?

[Wendy Cutler]

Deal. But weak deal.

[Waylon Wong]

Another weak deal similar to the UK then.

[Darian Woods]

So this brings us to our third and final component. Wendy says congressional involvement was key in the free trade deals she worked on.

[Wendy Cutler]

We consulted with Congress extensively. When we came back from negotiating rounds, we briefed Congress about what happened.

[Darian Woods]

Some kinds of trade deals even require Congress to approve them, and then they become legally binding treaties between countries. The United States, Mexico, Canada agreement, which replaced nafta, is an example of this.

[Waylon Wong]

The agreements with the UK and China did not require congressional approval. And so far, in the administration's trade war, Congress has really taken a back seat. It's the executive branch that's been the architect of the tariff policy.

[Darian Woods]

So, Wendy, Congress doesn't have to be involved. Could there still be a deal without that deal or no deal deal.

[Wendy Cutler]

But I don't know how durable it is.

[Darian Woods]

Ok, so technically a deal, but just squeaking vibes. All right, so to recap our three rounds, Wendy's lukewarm about how these deals handle disputes and the role of Congress, but she sees the lack of commitments as a real flaw.

[Waylon Wong]

Yeah, and when Wendy takes a step back and scrutinizes the UK And China deals from a high level, she really doesn't see anything resembling the kinds of agreements she worked on during her career.

[Darian Woods]

And Wendy adds a meaningful trade deal. Comes out with both sides feeling good about the outcome. That's not what she's seeing here. The UK and China were responding to Trump's high tariffs and we Wendy says if one side feels strong armed into making a deal, that can create problems.

[Wendy Cutler]

In order for a deal to be meaningful and durable, it needs to be a win win agreement. If the other side feels like they've been bullied into a negotiation or they were kind of forced to agree to things they didn't like and on top of it, they didn't have a lot to show in terms of what they gained when they would go home, you'd have many more implementation problems going forward.

[Waylon Wong]

Well, Wendy, you've been a fabulous contestant on Deal or no Deal.

[Wendy Cutler]

What's my prize?

[Waylon Wong]

What kind of prize? We should have come up with something.

[Wendy Cutler]

You're in one of those Wheel of fortune kind of $40,000 things.

[Waylon Wong]

Yeah, yeah, you can spin the virtual wheel, Wendy.

[Darian Woods]

She wants to make a deal with you.

[Waylon Wong]

I think what Wendy won is the chance to come back and play another really weird game show on the Indicator.

[Darian Woods]

So. So Wendy, was that a deal or no deal?

[Waylon Wong]

She's running away. This episode was produced by Julia Ritchie with engineering by Kwesi Lee. It was fact checked by Sierra Juarez. Caitlin Cannon is our show's editor and the Indicator is a production of npr. Oh, and it's filmed in front of a live studio audience of three people.

[Darian Woods]

You, me, and producer Julia.

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