As trade talks continue between the United States and China, negotiators have reportedly begun drawing up a series of formal memos of understanding – or MOU – which would serve as the basis for a comprehensive agreement. That wouldn’t be especially notable, were it not for how Donald Trump handled this seemingly unimportant procedural detail on Friday afternoon.
During an Oval Office meeting with U.S. Trade Representative Robert Lighthizer, who’s overseeing the White House’s trade talks with China, and a delegation from Beijing, including Chinese Vice Premier Liu He, Trump said he had no use for memoranda of understanding “because they don’t mean anything.”
It led to this exchange, in which the American president’s own trade rep apparently tried to explain a basic element of the negotiations:
LIGHTHIZER: An MOU is a contract. It’s the way trade agreements are generally used. People refer to it like it’s a term sheet. It’s not a term sheet. It’s an actual contract between the two parties. A memorandum of understanding is a binding agreement between two people. And that’s what we’re talking about. It’s detailed; it covers everything in great detail. It’s just called a memorandum of understanding. That’s a legal term. It’s a contract. […]
TRUMP: By the way, I disagree. I think that a memorandum of understanding is not a contract….
It was at this point that China’s vice premier actually started laughing, apparently amazed that the American president and the top American trade negotiator couldn’t even agree on the purpose and significance of an MOU.
Trump and Lighthizer weren’t even at odds over some substantive element; they were disagreeing over the definition of a routine phrase.
And so, the U.S. trade rep, trying to brush off the embarrassment of having been incorrectly corrected by his boss in front of his Chinese rival – and assembled journalists – came up with a solution: barring use of the phrase that Trump doesn’t like:
LIGHTHIZER: From now on, we’re not using the word “memorandum of understanding” anymore. We’re going to the term “trade agreement.” All right?
LIGHTHIZER: No more. We’ll never use the term again.
LIGHTHIZER: We’ll have the same document. It’s going to be called a “trade agreement.” We’re never going to use “MOU” again. […]
TRUMP: Good. Good. I like that much better. I like that term much better.
The Republican president, who knows far less about trade than he likes to pretend, is routinely far more interested in what things are called than the substantive details. This latest example was literally laughable.
Trump is already the punch-line to jokes in Beijing. The Oval Office meeting that prompted the Chinese vice premier to laugh out loud at the White House team probably won’t help matters.