Here's Why Trump's Trade Deals Are So Different This Time
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Bloomberg Audio Studios. Podcasts, radio, news. I'm Stephen Carroll and this is Here's Why, where we take one news story and explain it in just a few minutes with our experts here at Bloomberg. We've made a deal with probably four or five different countries. With the UK, it was a great deal for both.

and we're in the process of making some others. This is unfolding exactly like we thought it would. We've got 90 deals in 90 days, possibly pending here. We will cut those deals as soon as we possibly can, country by country, tailor-made deals for each and every country as they all propose unique challenges. As always, there's going to be a flurry going into the final week as the pressure increases.

It's a race to the finish line for countries to get a deal before Donald Trump's tariff pause elapses on the 9th of July. The US president's promise to redraw global trade relations was one of the centerpieces of his election campaign. It's a strategy with high stakes for the global economy and America's relationships with allies and adversaries alike.

But the deals announced so far don't resemble traditional trade agreements. Here's why Donald Trump's trade deals are so different this time.

Our EMEA News Director Rosalyn Matheson joins me now for more. Ros, remind us, what did Donald Trump set out to achieve with this trade offensive? It's basically amping up Make America Great Again, his policy of MAGA, which is promising voters when he was coming into the election that he would bring back jobs, he would bring back manufacturing and he would make America the centrepiece

of that. And he needs to get the wins on the board pretty quickly as a result to show the US people that he is delivering on those election promises, even if the trade deals that he's getting so far are broad outlines, he can stack them up and say, look what I've got for you already in terms of helping the economy and American jobs. So there's that aspect to it. But there's also for Donald Trump, really an underlying belief here that he seems to harbour, which is that

for many years, the US gave its leverage away. It let other countries take advantage of it when it comes to trade and investment, and that the US now needs to reorganise that and bring some of that leverage back home. And part of this trade offensive is for him about levelling that field a bit. And that seems to be quite a fundamental belief that he holds underneath all his election promises.

How different is this strategy to what we've seen previous presidents do on the trade front? There are three things that really stand out there. One is that he approaches everybody as a competitor. So whether they're a longstanding ally in Asia or in Europe or an adversary like China, I mean, he was pretty tough in his first term, including with Asian allies, but he's a lot

tougher now and very much doing so publicly. So approaching everybody as a competitor, no matter what the broader frame is of that relationship. Another thing that he's doing, which is different, is bundling everything into the conversation. He really does blur the lines. Other leaders, notably Barack Obama and Joe Biden, before him, they tried to bifurcate things, put them into compartments. So you had trade in one bucket.

And it was independent really from the broader relationship. So if you had political tensions that were separated out, security matters separated out. Donald Trump keeps it all in one soup together. So a trade deal might involve in Donald Trump's mind the status of defense contracts, for example. So that's very different. And also he's very changeable.

He's really cutting out bureaucrats a lot, driving this personally from the White House with his inner core. And he's very hard to read as a result. He can change his mind quickly. He can go from happy to angry and back again. And that makes negotiating or understanding where you lie with the US very difficult. How can we describe the results then that have been achieved so far? What sort of agreements have been reached?

The agreements that have been reached are very broad. They're almost more like MOUs than a trade deal. They're a framework maybe. And we can see that very much in the deals that have been struck so far. They have general terms, normally the headline figures on tariffs,

and they punt the really hard stuff, the complicated detail that you normally see in a trade deal well down the track. And so you get a very general understanding in those initial frameworks and then the sense is that the bureaucrats are allowed to get down to work. In a trade deal, normally it takes many years to get there. These are thousands of pages of documents and great complexity throughout. These agreements so far are very, very general. What?

What sort of issues could arise with having these sort of framework agreements instead of those deeper trade agreements that were things that we were more used to in the past?

One of the things that you can risk is confusion on the implementation side. And in fact, we've seen that before with the US and China, previous understandings, and then one country accusing the other of not holding to that understanding. And a lot of confusion in the aftermath means you end up with one country saying, hang on, you're not complying. And one country saying, I'm not quite sure what we're supposed to be

complying too. And if those understandings are so general, it's very easy to accuse the other country of not making good on it. And it might not be because of ill intent, but the other country simply doesn't quite know. They have maybe a perception in their mind of what the arrangements are versus the others. So a real risk in all of this is you do get a lot of confusion in implementing a

the agreement, even its broadest terms? And also, how do you then get the meat on the bone? So the problem is, how do you go from those very broad frameworks into something much more detailed? And how do you get the impetus for that to go? Donald Trump seemingly just wants the headline figures and moves on. But where is the push coming to really sit down and tackle the more complex issues? Could other countries take the same approach that Donald Trump and the United States have taken

to trade. Could this actually be a new form of trade relations that's now emerging? Well, it does seem that getting just something on paper may be an approach that other countries take to sort of a trade light approach and MOU, you know, keep the detail for later and at least get something down so you avoid an escalating trade war with other countries.

And so, you know, for a lot of countries, things around the movement of people, services, that's all very complex. So that might be one way to get something down initially. But again, it's all about your leverage. It's easy for Donald Trump to take this approach, which is quite a lot of stick and

and using the clout of the US to force things over the line when you're the biggest player in the room. If you're a much smaller country, your leverage is a lot smaller and your ability to negotiate even these kinds of frameworks diminishes. I mean, if you're a big block,

like the EU, a country like China, but even a country like Japan has had a lot of struggles here with the US, despite being a massive investor in the US, despite having that trade clout, Canada equally. And if those big countries are struggling, then the smaller ones definitely will. And it doesn't feel like it's a template, therefore, that they could adopt. Okay, Rosalind Matheson, our EMEA News Director, thank you very much.

For more explanations like this from our team of 3,000 journalists and analysts around the world, go to bloomberg.com slash explainers. I'm Stephen Carroll. This is Here's Why. I'll be back next week with more. Thanks for listening.

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