To President Donald Trump’s camp, his scorched-earth challenge to key U.S. allies over trade and his valedictory denuclearization pact with Korean dictator Kim Jong Un amount to a compelling midterm pitch from the man who promised to shake up the global order.

But the president’s big moves of the past few days also represent a giant bet that he can keep his negotiating partners at the table between now and November.


Just as Trump got Kim to stick to plans for the Singapore summit by sending a letter threatening to withdraw, the president expects spurned U.S. trading partners — Canada, China, the European Union — to come to the table rather than call Trump’s bluff and go for a trade war heading into the fall, said Jason Miller, who served as the senior communications adviser to Trump’s 2016 campaign.

“The U.S. is a fantastic market for these countries, and many of them have trade surpluses,” Miller said. “They don’t want to kill the golden goose.”

While Trump’s North Korea peace gambit could spark a diplomatic blowup — or worse — the president has already cracked open an escape hatch, conceding to reporters in Singapore that he may be wrong to trust Kim. “I don’t know that I’ll ever admit that, but I’ll find some kind of an excuse,” Trump said.

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His bellicose strategy on trade, however, presents significant economic perils for the president and his party heading into the elections, with fewer opportunities to pass the buck. Economists warn that the biggest risk to an otherwise strong U.S. economy is a Trump-induced global trade war that could see the collapse of the North American Free Trade agreement, a tariff battle on automobiles with the European Union and a series of escalating trade levies with China that could drive up consumer prices and anger voters.

“There’s a lot of nervousness,” Brandon Scholz, a Madison-based consultant and former executive director of the Wisconsin Republican Party, said of the uncertainty around trade. “I don’t think this story goes away.”

America’s trading partners in the European Union, Mexico and Canada have already shown their savvy about targeting tariffs to exact maximum political pain in the U.S.

The EU announced plans for retaliatory tariffs aimed at Harley-Davidson, made in the swing state of Wisconsin, as well as Kentucky bourbon — a swipe at Senate Majority Leader Mitch McConnell’s home state. Mexico said it plans a 20 percent tariff on a variety of pork products that could slam U.S. producers. Canada plans to target American dairy products.

U.S. tariffs on China, should they go into effect, could raise prices on a wide range of consumer goods, which could increase inflation and force the Federal Reserve to speed up interest rate hikes. That’s led some analysts to argue that a significant slowdown could occur later this year.

“While a near-term recession seems remote, a surprising slowdown in the global and U.S. economy is probably more likely in the balance of this year than most appreciate,” Jim Paulsen, chief investment strategist at The Leuthold Group, wrote in a note to clients this week.

American ranchers and farmers are beginning to grapple with tariffs on several Chinese exports, prompting China to retaliate with tariffs of its own on U.S. exports.

But by far the biggest threat comes from NAFTA. A collapse of the Clinton-era deal, which seems more possible now after Trump’s bitter fight with Canadian Prime Minister Justin Trudeau, would likely tank the stock market and blow up supply chains that U.S. manufacturers rely on, while choking off two of the biggest markets for American exports.

“A NAFTA collapse has the potential to directly slow down the U.S. economy when it is finally having a nice, sustained period of faster growth for the first time since the Great Recession,” said Bodhi Ganguli, lead economist at Dun & Bradstreet.

In Washington, aides have moved to paper over some of the worst damage, with trade adviser Peter Navarro apologizing for his comment that Trudeau deserves a “special place in hell” for holding a news conference criticizing Trump’s trade stance after the president left the G-7 summit en route to meet Kim in Asia. “There's a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door,” Navarro told Chris Wallace on “Fox News Sunday.”

On Tuesday, Navarro said at the Wall Street Journal CFO Network conference that he’d made “a mistake.”

“My mission was to send a strong signal of strength,” he said. “The problem is that in conveying that message I used language that was inappropriate.”

Before the apology, White House legislative director Marc Short was already taking steps to defuse the situation. “I think that the reality is that the president felt that they had had a productive meeting,” Short said in a CNN interview on Monday. “But no, I think that the judgment day that separates us from heaven or hell is not dependent upon whether you agree with the president or not, so I do not think that it is the official position.”

But Trump’s political team, which has organized around the strength of the economy, is casting Trump’s outburst over trade as another promise kept, proof the president is living up to his slogan of putting “America first” instead of appeasing foreign interests — as so many of his predecessors have done. Aides described the president as particularly frustrated that some of America’s strongest allies have, in his mind, been some of its worst offenders on trade and economic issues.

Trump’s threat to impose tariffs on European automobiles would cause headaches for Germany, whose BMW, for example, sells 350,000 cars a year in the U.S, about 70 percent imported from Europe. But as one former Trump campaign official put it of the president’s base: “They don’t buy BMW.”

The man steering Trump’s 2020 reelection, Brad Parscale, piggybacked on the president in accusing Canada, which has imposed 270 percent tariffs on products like blended dairy powder, of unfairly complaining about Trump’s tariff threats. “Why the big show with steel? Because this is how they beat previous administrations. @realdonaldtrump is not afraid to get TOUGH on behalf of the American worker!”

Trump is already planning to take his message directly to voters. His next Make America Great Again Rally is June 20 in Duluth, Minnesota, where he’s expected to play up the meeting with Kim along with the surging economy, low unemployment and “new trade reforms.”

The following week, Trump heads to Mount Pleasant, Wisconsin, for groundbreaking of the Foxconn Technology Group manufacturing plant, before headlining a fundraiser.

Curtis Ellis, a senior policy adviser for the Trump campaign now with the pro-Trump advocacy group America First Policies, said he is confident the president’s strategy will pay off.

“The world is not coming to an end. This is not the end of international trade. It’s not a trade war. It’s essentially rebalancing the terms of international trade so that everyone can indeed prosper,” Ellis said. “When you tell your kid to get their hand out of the cookie jar, he’s not going to like that. It doesn’t mean you are going to abandon your kid or put them up for adoption.”