The Indicator from Planet Money - Are Trump's trade deals the real deal?

Episode Date: May 29, 2025

Top Trump advisers have been boasting about 'awesome' trade deals the administration is negotiating with other countries. But are these deals real? Today on the show, we ask a former U.S. trade negotiator whether these agreements hold up. Related episodes: Dealmaker Don v. Tariff Man Trump (Apple / Spotify) Why there's no referee for the trade war (Apple / Spotify) Is this a bank? For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org. Fact-checking by Sierra Juarez. Music by Drop Electric. Find us: TikTok, Instagram, Facebook, Newsletter. See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

NPR. This is the indicator from Planet Money. I'm Waylon Wong. And I'm Daryam Woods. We have been hearing so much talk from officials in the Trump administration about dealmaking, like from trade advisor Peter Navarro. We're going to run 90 deals and 90 days. Or Kevin Hassett, another economic advisor?

Everybody has seen awesome deals that are out of the table. Last week, we were in the Middle East cutting trillions of dollars of deals with our Middle Eastern friends. 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. The European Union this week said it's fast-tracking trade talks of the U.S. And the White House has already announced two deals with UK and China.

So there's been a lot of celebration. But what do these PACs actually involve? And are they really even deals? Today on the show, a former trade negotiator for the U.S. U.S. puts these agreements to the test. There's no real training to become a trade negotiator for the U.S. government. It's a learned 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 are often high-pressure complex situations. 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're 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. And so... Really? They're playing

little mind games with you in the room? 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. 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. 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. Wendy, are you ready to play deal or no deal? All good. Okay. Whatever. 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 country's promise to do. It was always the parties shall do this. 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. 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. 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. 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 future negotiation. Like a pre-deal before the real deal. Exactly, exactly. 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. Okay, so Wendy, in this first round, deal commitments are part of the text, or no deal. It's more intent than commitment. No deal. Ooh.

No deal. No deal. Okay, so for round one, commitment, no deal. Now onto the second hallmark of a proper trade deal, we're calling this round dispute settlement. 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. 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. 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 how the UK deal handles disagreements, you see no dispute settlement mechanism. Okay. So for the UK on the UK on. dispute settlement, deal or no deal. Deal, but weak deal. Better. 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. They announced plans to negotiate over the next 90 days during this truce. And I'm not saying the process isn't important. It is important. And de-escalating tensions, important. All right. So for China on dispute settlements, Wendy, deal or no deal? Deal, but weak deal. Another weak deal. Similar to the UK, then. So this brings us to our third and final component. Wendy says congressional involvement was key in the free trade deals she worked on. We consulted with Congress extensively. When we came back from negotiating rounds, we briefed Congress

about what happened. 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. 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 brand that's been the architect of the tariff policy. So, Wendy, Congress doesn't have to be involved. Could there still be a deal without that? Deal or no deal? Deal, but I don't know how durable it is.

Okay, so technically a deal, but just speaking vibe. All right, so to recap our three rounds, Wendy's lukewarm about how these deals handle disputes in the role of Congress. But she sees the lack of commitments as a real flaw. 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. 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 Wendy says if one side feels strong-armed into making a deal, that can create problems.

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 read a 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. Well, Wendy, you've been a fabulous contestant on Deal or No Deal. What's my prize? What kind of prize? We should have come up with something. You're not one of those Wheel of Fortune kind of $40,000 things? Yeah, yeah. You can spend the money. Virtual wheel, Wendy.

She wants to make a deal with you. I think what Wendy won is the chance to come back and play another really weird game show on the Indicator. So, Wendy, was that a deal or no deal? She's running away. This episode was produced by Julia Ritchie with engineering by Kwayze. It was fact-checked by Sierra Juarez. King & Canyon 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, you, me and producer Julia. Ha ha ha ha ha ha ha