The Peter Zeihan Podcast Series - The Art of Trump’s Trade Deal || Peter Zeihan

Episode Date: July 7, 2025

Robert Lighthizer, the former US Trade Representative during Trump's first term, declined to return for a second term? But why?Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://mailchi.mp/zeihan/the-art-of-trumps-trade-deal

Hey all, Peter Zine here taking a question from the Patreon page today. Specifically, it's about Robert Lightheiser, who was the trade representative under the first Trump administration, but who declined to accept a trade rule in the second. The question is, if Lighthizer had come in, would his general strategy of isolating China been successful? For those of you who don't remember, Lighthizer has been an old-handed American trade law going back 40 years. and has always approached it from a far more bare-knuckled approach than some of the more, how should we say, genteel negotiators. He was really, really brass tax when it came to, say, the Plaza Courts during the Reagan administration or trade deals with the Japanese. This time around, his general approach was to strike meaningful trade deals with all of America's allies first and then basically bring everybody together into a solid block to force concessions out of the Chinese.

Now, do I think that would have been a better strategy than what the Trump administration is doing, which is basically picking a trade fight with everyone at the same time? Well, yeah, but there's really no point in crying over spilled milk because Lighthizer did not take the job. Now, the question is, why not? And what does that mean for the trade authority? Now, Lighthizer is getting up there. He's, I believe, early, late 60s, early 70s now? I'm really not sure.

Anyway, he's not a spring chicken. He's been doing this since the Reagan administration. So it makes sense that he wouldn't want to work Washington hours for another four years. But more importantly is the structure of what is happening at the federal government and how that limits what the trade representative can do. Two things here. Number one, when Trump came in, he cleared out the entire upper echelon of senior civil servants. Only about 5% of them have been replaced. Normally when a president comes in, they just take out the top layer and leave all the people with the institutional knowledge, but Trump just fired everybody.

And so all of the federal bureaucracy is basically having a problem functioning because the upper middle and upper management are simply empty. So there is no one to carry out Trump's orders. He's got some people at the top with the secretaries and maybe a few undersecretaries and that's just it. And all of those people are political appointees that are basically new to the industries. So there's no one to make sure that the president's orders can be followed. Problem one. Problem two. It's worse for the U.S. trade representatives.

office. Joe Biden was only the second president in recent American history to negotiate no new trade deals. And his trade representative, Catherine Tai, was good at her job, but she focused on enforcing the previously negotiated deals and having a bunch of memorandums of understanding. So during the four years of the Biden administration, the USTR's office was slimmed down considerably. And now under Trump, too, it has not been re-expanded. So not only is the USTR missing? its upper leadership, it's missing a lot of the rank and file people who would normally negotiate trade deals. So that's number two. Number three, trade deals. They take a lot of time. There's a lot of details. The fastest trade deal the United States has ever negotiated was with Singapore. That took

10 months. And that's because Singapore is a city state. It doesn't have an agricultural sector. So there weren't a lot of sensitive topics that really need to be ironed out. Most trade deals take in excess of three years. Some of them take significantly longer. And so if you were Robert Lighthizer and you're looking at this and you realize you're going to have no staff, no assistance, no deputies, and the Trump administration is going to want you to negotiate 200 trade deals at the same time, he was like, I'll pass, thanks. The person who is the USTR now is basically a former protege of Rob Leitheiser. His name is Jameson Greer. He was actually served in UST, He are during Trump won as Bob Lighthizer's chief of staff.

The guy is far from incompetent. He's pretty good at what he does from my point of view. But he has those three problems. He has no deputies. He has no staff. And he's expected to negotiate 200 trade deals at the same time. So the end result is we're not getting anything. Of the two deals that have been agreed to so far, the two deals.

The first one was with the Brits where they basically, they were planning on buying a number of businesses. Boeing jets over the next eight years, so they cut that order in half, said, announced it in terms like, it's a deal. And that's all that happened. And with the Chinese deal, all it was was an agreement to talk. Of course, there's no one in Washington to speak with because there's no staff. So we're kind of stalled, and I don't blame Lighthizer for saying pass on this one.