MW Trump wants dozens of new trade deals. Can Washington's trade machine handle the load?

By Chris Matthews

Trade partners may be reluctant to trust the White House's commitments

President Donald Trump on Wednesday announced a 90-day reprieve on many of the sweeping tariffs he unilaterally imposed on U.S trade partners, giving major U.S. trade partners - with the notable exception of China - a narrow window to negotiate new trade deals.

The president said dozens of leaders have called the White House "begging him for a deal." Yet Washington's trade bureaucracy is not built to strike dozens of deals at once, and the ad hoc nature of Trump's trade policy could make it difficult to strike a lasting trade peace.

The pause, billed by the administration as a strategic opportunity for bilateral talks, will put pressure on a small cadre of U.S. trade officials to manage what could quickly become a sprawling and uncoordinated negotiation process.

Experts say that while the tariffs may have succeeded in forcing engagement, the federal government may not have the institutional bandwidth to follow through at scale.

"It's going to stretch the capacity of our negotiators, particularly in an administration where a lot of political officials haven't yet been confirmed." Wendy Cutler, a former acting deputy U.S. trade representative, told MarketWatch. "Everyone is going to have to step up and, frankly, give up their weekends."

The last time Washington came anywhere close to this level of trade ambition was during George W. Bush's presidency, when the U.S. launched a series of bilateral and regional negotiations under new authorities granted to it by Congress.

Even then, officials warned that the Office of the U.S. Trade Representative was operating at the edge of its limits. A report by the Government Accountability Office at the time found that nearly all USTR staff were involved in each negotiation at some point, and that the agency's resources were "heavily committed" across a sprawling agenda.

At the time, the USTR was simultaneously negotiating or finalizing free-trade agreements with Australia, Morocco, Bahrain, the Dominican Republican and several Central American nations that eventually came to be included in the Dominican Republic-Central America Free Trade Agreement. To cope, trade officials sequenced negotiations region by region, reused negotiating texts and pulled in help from other agencies - but still struggled to keep up.

The USTR operates with a lean staff of about 250 full-time employees in offices from Washington to Singapore, a number that has essentially remained flat for years. They are supported by the International Trade Administration, housed within the Commerce Department. But even with Commerce's support, experts say the combined trade workforce is not built to handle a wave of comprehensive and concurrent bilateral trade deals without prioritization or sequencing.

The Trump administration's reciprocal-tariff regime was calibrated to reflected the size of the trade deficit with each country; the larger the deficit, the higher the tariff.

Ira Shapiro, a former U.S. trade negotiator who worked to secure better access to Japan for American car manufacturers, said that reducing trade deficits in certain products can be very difficult, even when both sides of a negotiation are highly motivated.

"The quality of Japanese cars and the established distibution networks made this very difficult to do," he told MarketWatch. "What I ultimately concluded, and what many others did, was that our best bet was to make the U.S. attractive for Japanese companies to invest and manufacture here."

Japanese firms took that strategy to heart, and in recent decades, Japanese automakers and parts suppliers have steadily expanded their U.S. footprint - helping offset the trade imbalance not by increasing U.S. exports but by bringing production and jobs stateside.

Economists note that foreign direct investment doesn't necessarily reduce the trade deficit, but it does create economic benefits for Americans. Nevertheless, the U.S.-Japanese trade deficit persists, inviting President Trump's ire.

Unlike the Bush-era trade deals - most of which were negotiated at the direction of Congress - Trump's new batch of negotiations will also lack any formal legislative imprimatur. Without this so-called trade promotion authority, the administration can still strike agreements, but the deals won't be written into law and can be reneged on by Trump himself or future administrations.

Trade economists say this matters. Binding agreements - those ratified by Congress and incorporated into U.S. law - tend to deliver more predictable economic benefits by creating legal certainty that creates incentives for business leaders to invest in capital-intensive projects like factories and plants.

As Georgetown University international trade scholar Nuno Limao wrote in a recent analysis of trade-agreement economics, binding agreements make companies "more willing to export, invest and enter new markets."

Cutler, the former trade negotiator, said the lack of congressional authority in these negotiations may also blunt the lasting impact of any deal, as will the mercurial nature of Trump's tariff policymaking in recent weeks.

"What will be interesting to see in these negotiations is whether countries demand from the United States a moratorium on new tariffs from the Trump administration," she said. "There's a huge trust deficit right now between our trading partners and the United States, and when you're negotiating these agreements, one of the most important elements for success is trust."

-Chris Matthews

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April 09, 2025 16:55 ET (20:55 GMT)

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