Trump’s phone call with the Mexican president shows that he’s terrible at making deals

A leaked conversation between Donald Trump and Mexican President Enrique Peña Nieto provides some new insights into the negotiating skills that Trump routinely boasts about — but that don’t appear to be particularly effective when dealing with a fellow world leader.

During the call, which took place just a week after his January 20 inauguration, Trump focuses on a pair of thorny issues: the border wall that he has insisted Peña Nieto’s government would pay for and his calls to reduce America’s trade deficit with Mexico. The transcript was obtained and published by the Washington Post.

Trump begins by insisting that he’d effectively done Peña Nieto a favor by allowing some of his top advisers, including son-in-law Jared Kushner, to meet with Peña Nieto’s foreign minister in advance of their call.

“I was not really in favor for that meeting. I felt that we should do a much simpler solution, and that solution was tariffs at the border,” Trump says early on.

What he’s suggesting is that he could’ve simply slapped huge punitive border taxes on Mexican goods, as he had promised on the campaign trail, rather than allowed talks to begin between the US and Mexico. He’s also implying that such an option — which would cause serious damage to Mexico’s economy and make Mexican-made goods far more expensive for Americans — remains on the table.

“It could be 10 percent or 15 percent or it could be 35 percent [tariffs] for some products,” Trump says, in a gesture akin to letting someone glimpse a gun concealed under your jacket.

That was probably his strongest moment; regardless of whether you agree with him on the effectiveness of tariffs — and most economists don’t — the president was making his points clearly and cogently.

That discipline didn’t last. As the call went on, Trump lapsed into his stream-of-consciousness rhetorical style (during the call, he speaks far, far more than Peña Nieto) and demonstrated that he had little to no understanding of the substance of the issues the two leaders were discussing. Trump even candidly admitted that he’d backed himself into a corner with his promise to make Mexico pay for the border wall.

By the end of the hour-long conversation, one thing was clear: Muscular rhetoric aside, Trump had extracted virtually nothing from Peña Nieto.

The most revealing exchange in the conversation is Trump’s scramble to convince the Mexican leader to change his rhetoric on the wall. The Mexican leader had spent months rejecting the border wall and promising Mexico would never pay for it.

“The fact is we are both in a little bit of a political bind because I have to have Mexico pay for the wall — I have to,” Trump says. “I have been talking about it for a two-year period, and the reason I say they are going to pay for the wall is because Mexico has made a fortune out of the stupidity of US trade representatives.”

Trump argues that he and Peña Nieto are better off by dropping the public back and forth in which each insists that the other will pay for the wall.

“They are going to say, ‘Who is going to pay for the wall, Mr. President?’ to both of us, and we should both say, ‘We will work it out,’” Trump says. “It will work out in the formula somehow. As opposed to you saying, ‘We will not pay’ and me saying, ‘We will not pay.’”

Trump tries to argue that the wall is primarily an issue that matters “psychologically” and that the actual cost of building the wall is in fact minimal. “I know how to build very inexpensively, so it will be much lower than these numbers I am being presented with,” he said.

There are a number of issues here. Take Trump’s claims about the price of the wall, which the president publicly argued would cost between $10 billion and $12 billion and suggests in the call would cost even less. The problem is that the Department of Homeland Security estimated in February that the cost would be close to $22 billion. Trump doesn’t appear to understand that the true costs of the wall are likely to be so high that even if Mexico were willing to pay for it — which the country most decidedly is not — it would deal a serious fiscal blow to the country.

But Trump doesn’t get Peña Nieto to make any substantive concessions on the wall. Despite Trump’s repeated pleas that the Mexican leader change his tune on refusing to pay for the wall, Peña Nieto doesn’t make any promises. Instead his counteroffer is for both countries to avoid discussing the funding of the wall publicly.

“Let us for now stop talking about the wall,” Peña Nieto says. “Let us look for a creative way to solve this issue, for this to serve both your government, my government, and both of our societies.”

Peña Nieto doesn’t change his position on refusing to fund the wall, but he basically argues that he and Trump can have a de facto truce by agreeing to stop arguing about it in public. Trump calls it “fair,” and they seem willing to leave it there.

So to sum it up: Trump gets on the call, admits he’s put himself in a tricky situation, is unable to get Peña Nieto to agree to his suggestion that he stop pushing back against Trump on who funds the wall, and ends by kicking the crucial issue of who will actually fund the wall down the road.

And as far as their back and forth on trade is concerned, Peña Nieto makes no meaningful concessions or promises and criticizes Trump for deviating from the plans discussed by their teams in the runup to the call.

Trump, though, does seem rather elated by the end of the call. “It is you and I against the world, Enrique, do not forget,” he says, wrapping up what he evidently perceives as a successful exchange.

But after the call, even the modest agreement that Trump and Peña Nieto had settled on about avoiding public discussion about which country would pay for the wall quickly fell apart. Washington and Mexico City’s joint statements on the matter took different paths: The Mexican release announced their agreement not to speak publicly about funding the wall, but the US statement made no mention of it.

That was five months ago. It should probably come as no surprise that the two countries continue to trade blows over the wall — and to fight about who will ultimately pay for it.