Iran strike intensifies Trump counterparty risk
WASHINGTON, June 23 (Reuters Breakingviews) - Donald Trump's negotiating style precedes him. The American president routinely stiffs counterparties, but also typically caves when the stakes get too high. By dropping bombs on Iran's nuclear sites and directly dragging the United States into another Middle East conflict, he has upended this conventional wisdom. It leaves trade partners facing an upcoming deal deadline with a tricky wrinkle to consider.
In recent months, the Trump administration had settled into a pattern of bellicose threats followed by pullback. Paused tariffs and partial agreements with China and Britain to lower their levy rates epitomize the idea. The president also offered a familiar mix of bluster and pliability when he opened talks with Tehran in April over its nuclear program while simultaneously threatening the Islamic Republic with 'great danger.' The diplomacy was partly a ruse, the New York Times reported, opens new tab on Monday, to conceal U.S. plans to back Israel's military campaign.
Trump's willingness to greenlight a dangerous operation, ostensibly aimed at hindering Iran's ability to build deadly weapons, sends a somewhat new message. The White House is more willing to enter messy situations than perhaps was previously expected.
Beijing opportunistically cast doubt on U.S. credibility. China's accusations are familiar, but amid Trump's retreat from foreign aid, international institutions and mutual defense pacts, the latest critique carries more weight. Leaders in Europe, Canada and Mexico have made similar points: the United States is no longer a dependable ally, and any pacts with the erstwhile hegemon warrant extreme caution.
Those same nations, along with Japan, Vietnam and other major trading partners, will have to rethink the calculus on striking agreements that govern the import and export of some $5 trillion in goods. Preserving temporary calm may hold greater appeal now than tempting Trump to follow through on threats of higher tariffs or even weightier steps. He has dangled the idea of withdrawing from NATO and disregarding security arrangements in the Pacific.
There's no sign that Trump's July 8 target date for trade deals will be extended, but the UK, opens new tab may have shown the way forward with its vague blueprint. Delay any consequences as long as possible without ceding ground to the man across the table you don't trust.
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