Trump, Litigation and Threats: From Queens to the World Stage.

    

     From the Introduction to my new article …………. Stuart Malawer, “Trump, Litigation and Threats: From Queens to the World Stage.” China and WTO Review 209 (Spring 2020) ……………………

Donald Trump was born and raised in Queens, New York, one of the five boroughs of New York City, with a current population of more than two million. His formative years were during the 1960s and 1970s. Born in Queens at about the same time as Trump, I lived within a mile or two of Donald Trump during many of those formative years.

From the outset of Donald Trump’s real estate career, and then his public one, I understood his ruthless approach to conducting transactions, always relying upon bullying and threats in negotiations and utilizing meritless litigation.

Very simply, his views were fostered by his contentious real estate career, which was conducted through myriad partnerships initially funded and organized by his father, Fred Trump. Multimillion dollar portfolios in real estate are often controlled by a small number of people operating through family-controlled or mom-and-pop operations. In this case, the Trump Organization, which Donald Trump organized in 1976 when he began to emerge from his father’s coattails.

Unfortunately, the real estate industry is marked by extremely contentious relations. Threats and litigation are hallmarks of this hypercompetitive industry, in which millions, if not billions, of dollars are at stake. Real estate and partnership litigation are well-known to be extraordinarily brutal because so much money and so many egos are involved. Donald Trump is a product of this environment, even more so than most real estate investors.

Donald Trump’s methods of operating and conducting national security and foreign policy are exactly the same as they would be if he was engaged in real estate transactions and deals. To Donald Trump, trade policy, foreign policy, and national security policy are transactions and zero-sum games. He makes decisions with only a few people around him, including his family members, using threats and litigation to get his way.

My thesis is straightforward: One can draw a straight line from Donald Trump’s ruthless mode of operating in the contentious world of New York real estate to his operations on the world stage today.

From Queens to the world stage, there is a straight line from using threats and litigation to avoid commercial and contractual obligations to using threats and litigation in conducting the US foreign and trade policy. Especially as to policies pertaining to the World Trade Organization (“WTO”) and the US–China trade relations. His weaponization of tariffs and economic sanctions is now being wielded as a principal tool of the US foreign policy for the first time since the early 1930s.

President Trump’s ruthless approach has been employed in a range of multilateral trade relations (such as the Trans-Pacific Partnership and the US-Mexico-Canada Agreement), and bilateral agreements with Korea and Japan. It has also gone beyond bilateral trade disputes by attacking the legitimacy of the WTO’s judicial system and, indeed, the WTO itself. Beyond trade, this caustic approach has been applied to a range of issues in American foreign policy. For example, the withdrawal by the US from a broad list of international agreements and institutions, including the Iran nuclear deal, UNESCO, and the Paris Climate Accord.

                                               …………………………………………………….

 

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Time to Revisit State Law and Recognition of Foreign Judgments?

In a saga of twist and turns, a nightmare for any law student trying to map out lower court proceedings, or a crime novel, it is interesting to read a case from Texas that is now being considered for hearing before the U.S. Supreme Court.

It raises the issue of recognition of foreign judgments, a matter of state law. Coming from Texas, the case has taken a particularly unsettling turn, but not an unexpected one when concerning the oil industry. More than just unsettling for conduct of international business relations, but more so regarding the integrity of the state judicial process.

Maghreb Petroleum and Mideast Fund (19-789) is now before the U.S. Supreme Court, and the court is considering accepting it. Simply put, the plaintiffs were American investors in developing oil reserves in Morocco. As is not unusual, one investor (the plaintiff) claimed fraud involving the promoter (a Texan billionaire). This went to trial in Morocco, and the  plaintiffs secured a default judgment. They then brought an action in a federal court in Texas to enforce that judgment.

Lower federal courts recognized the foreign judgment. However, in the process, the state legislature in Texas changed the law. It allowed foreign judgments not to be recognized if there were irregularities in the particular proceeding. (The prior law allowed for assessment of only the foreign legal system itself.) On rehearing, the lower courts applied this new law, retroactively.

So what is the bottom line for me?

Failure to recognize a foreign judgment is not unusual. It is a matter of state law. What is somewhat unusual is the state legislature attempts to reverse a lower court’s judgment by changing applicable law, retroactively.  And for the lower courts to reverse themselves.

Again, it is not necessarily unusual for laws to be applied retroactively. But in this context, it certainly doesn’t inspire confidence in the integrity of the Texas courts.  Nor is it helpful to create predictability in international commerce, which is in the interest of the United States. Predictability encourages more commerce and investment.

This case involves a particular corner of federal-state relations. States are playing a bigger and bigger role in international commerce today. The case illustrates one aspect of that larger truth. Might it be time to federalize the rule governing recognition of foreign judgments impacting global commerce?

 

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Trump’s Trade Affronts Are Getting Worse ………….

 

 

       

                                                 [From the conclusion of a forthcoming article of mine.]

Trump’s disregard for international laws, institutions, alliances, and agreements is extremely worrisome. He possesses a truly generalized hatred for all rules that is mirrored in many ways, his management of the Trump Organization and his career as a real estate professional.

Trump’s disregard of international rules is clearly seen in his attacks on a broad range of treaties and institutions. I would argue none is more delusional than his frontal attacks on the WTO, the dispute resolution system and the Appellate Body.  These were devised primarily by the United States.  They are the central pillars of the global trading system today.  They help establish and litigate global trade rules. The boy from Queens is now causing havoc in Geneva, Brussels, Tokyo, Seoul, and almost all other world capitals.

Of course, President Trump’s abuse of US trade legislation (in his tariff and trade wars), his pattern of bullying and threats, his disregard of domestic law in a broad range of domestic matters, and his dealings with Congress are related stories. His rejection of international rules and institutions has its roots in his shameless attacks on domestic US law and institutions. All of these affronts are directly related to Trump’s days in Queens as a landlord sued by many, including the US Department of Justice.  These affronts continue today and are getting worse.

President Trump’s story has yet to play out on either the national or the international stage. His impeachment is already history. The 2020 presidential election is looming.

 

 

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TRUMP’S MORE AGGRESSIVE ATTACKS ON THE WTO.

Good summary of President Trump’s current attack plan on the WTO by Bloomberg’s Terms of Trade today (February 14th, 2020). The long-standing Trump administration animosity towards the WTO and the existing global trading system is gaining steam and becoming more aggressive. This is alongside of the administration’s newer vengeful attacks in the domestic realm in the post-impeachment saga.

 

President Donald Trump has never been a fan of the World Trade Organization.

For years Trump has called the Geneva-based body the “worst trade deal ever” — largely because he believes the WTO helped China gain a competitive advantage over the U.S. and precipitated the loss of thousands of American jobs.

Trump’s trade chief, Robert Lighthizer, supports this view and has expertly poked at the organization’s weaknesses.

Under Lighthizer’s stewardship the U.S. has:

    • Imposed hundreds of billions of dollars worth of unilateral tariffs against China
    • Exploited the WTO’s national security loophole to levy duties on steel and aluminum
    • Paralyzed the WTO appellate body, which can no longer resolve trade disputes

Collectively, these actions have thrust the WTO into the most acute existential crisis of its 25-year history.

But Trump may not be finished yet.

As Bloomberg reported this month, U.S. officials are now mulling America’s withdrawal from the WTO Government Procurement Agreement — a global trade alliance covering government contract opportunities worth $1.7 trillion.

U.S. withdrawal from the pact would effectively block most foreign, non-defense contractors from bidding on American public tenders. In turn, a wide range of U.S. businesses would lose access to a nearly $900 billion procurement marketplace offered by the GPA’s other 47 members.

Perhaps an even bigger blow would be a plan Trump insiders are said to be mulling to reset American tariff commitments at the WTO by increasing the tariff ceilings — or bound rates — agreed to by previous administrations.

The move stems from the Trump administration’s long-held frustration with the WTO’s principle of most-favored-nation (MFN) nondiscrimination, which requires members to offer the same tariff rates equally to all of the organization’s 164 members. In essence, MFN is the cornerstone of the WTO — and undermining it risks tipping over the entire ant farm.

“President Trump sees it only as a constraint on his ability to strike quick-and-dirty deals,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. “But take away MFN, and suddenly the entirety of benefits that the WTO provides begins to unravel, including those that Americans have enjoyed for decades.”

On one hand, these kinds of salvos against faceless bureaucrats in Geneva will be an easy sell at home for Trump’s core voters during an election year.

But defenders of the rules-based global trading system say dismantling it would cause a severe shock to the American economy. They argue that despite its flaws, the WTO provides businesses with the certainty to trade and expand their operations internationally. Ultimately, the results are robust export industries that create good jobs, and for consumers, diverse and low-cost products moving around the world.

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TRUMP’S THREATS AND TRADE POLICY — From His Real Estate Days in New York?

From a forthcoming article of mine …………….

My thesis is straightforward: One can draw a straight line from Donald Trump’s ruthless mode of operating in the contentious world of New York real estate to his operations on the world stage today.

From Queens to the world stage, there is a straight line from using threats and litigation to avoid commercial and contractual obligations to using threats and litigation in conducting U.S. foreign and trade policy. Especially as to policies pertaining to the World Trade Organization (WTO) and U.S.–China trade relations. His weaponization of tariffs and economic sanctions is now being wielded as a principal tool of U.S. foreign policy for the first time since the early 1930s.

Donald Trump’s methods of operating and conducting national security or foreign policy are exactly the same as they would be if he was engaged in real estate transactions and deals. To Donald Trump, trade policy, foreign policy, and national security policy are transactions and zero-sum games. He makes decisions with only a few people around him, including his family members, using threats and litigation to get his way.

President Trump’s ruthless approach has been employed in a  range of multilateral trade relations and bilateral agreements (such as the Trans-Pacific Partnership and  the United States-Mexico-Canada Agreement), and bilateral agreements with Korea and Japan. It has also gone beyond bilateral trade disputes by attacking the legitimacy of the WTO’s judicial system and, indeed, the WTO itself. Beyond trade, this caustic approach has been applied to a range of issues in American foreign policy. For example, the withdrawal by the United States from a broad list of international agreements and institutions, including the Iran nuclear deal, UNESCO, and the Paris Climate Accord.

The Trump administration has been employing tariffs and economic sanctions more vigorously than any other administration as the principal tools of its foreign policy. You might even call Trump’s stance in this regard “foreign policy by tariff threats.”

Trump’s disregard for international laws, institutions, alliances, and agreements is extremely worrisome. He possesses a truly generalized hatred for all rules that is mirrored in many ways, his management of the Trump Organization and his career as a real estate professional.

President Trump’s story has yet to play out on either the national or the international stage. His impeachment is already history. The 2020 presidential election is looming.

 

 

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Iranian Assassination & Global Trade … Not Good for the Global Economy


The assassination of Major General Suleimani of Iran was a terrible blunder on many levels. 

One level that has not been talked about much is its potential impact on global trade.

To me there will be a significant impact, sooner than later. President Trump has already imposed new sanctions on Iran and threatens Iraq (for trying to force out US troops after 16 years). His disregard of U.S. and international law is stunning. His entire personal history of litigation has proven to be his template for governing as president and conducting international relations.

President Trump’s impulse is to destabilize international law and international institutions.

The Persian Gulf states are beyond nervous. So are the Europeans and the Japanese. Transit of oil through the Gulf is an obvious target. The price of Saudi Aramco stock (after its massive IPO) has already taken a hit. Price of gold and government bonds have risen. The price of oil has become even more erratic.

Things are not going to get better for anyone, anytime soon. U.S. threats to target Iranian cultural sites are unnerving and illegal, constituting war crimes if carried out. This newer reality is really, really unfortunate.  The risk of this situation unraveling is very great.

This threat to the global economy is a  foreseeable spinoff of an impulsive military action ordered by the United States president. The president’s decision is a stain on American diplomacy.  Worse than the sellout of the Kurds. I wonder where were the U.S. military and intelligence communities in this process.

You simply cannot rationalize the president’s action and tweets. There is absolutely no strategy here, whatsoever.

Doesn’t anyone in the administration read diplomatic or world history? Or even some basic American  foreign policy? One immediate remedy is for the congress to reclaim its constitutional war powers. Most importantly, foreign policy and national security must now become central to the 2020 election.

Very distressful.

 

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Donald Trump — From Queens to the Global Stage — Always Following his Inner Litigating Self.

 


 

From Jamaica Estates, Queens, to the White House — Donald Trump has consistently perverted the litigation &  judicial system. Domestically and internationally. This will not end well for him nor his enablers. It’s simply unamerican.

From his days as a real estate operator in Queens, New York, owning and managing middle class apartments, to the White House Donald Trump has  more than grossly abused the legal system.

As a private citizen he has been involved in 3,500 to 4,000 cases. Always lying. Losing or dropping most cases. This approach has been extended to Donald Trump’s actions on the international stage. In particular, his disregard for international law rules, institutions, alliances and agreements. He has a truly generalized hatred for rules. (This is mirrored in many ways his management of his Trump Organization, essentially a small management company, that employed his relatives and a few additional individuals.)

Trump’s disregard of international rules can be seen in his attack on a broad range of treaties and institutions. To me, none is more delusional than his attack on the WTO and the dispute resolution system. This system was devised by the U.S. and is the central pillar of the global trading system today — establishing global trade rules and in litigating them. The boy from Queens is now causing havoc in Geneva and other world capitals.

Of course, President Trump’s abuse of U.S. trade legislation in his tariff and trade wars, his disregard of domestic law in a broad range of domestic matters, and in dealing with the Congress is another story. But which is part of his generalized corruption of the legal system and is directly related to his days in Queens as a landlord sued by many including the Department of Justice.

 

“Trump’s Legal Strategy — Review of Plaintiff in Chief — A Portrait of Donald Trump in Lawsuits (2019).

Losing in Courts but Winning, Trump Can Run Out the Clock.New York Times (Nov. 28, 2019).

“Some Have Their Day in Court. The President Seems to Have Eons.New York Times (Nov. 7, 2019).

Malawer, “Trump, Trade and Federal Courts.”  China and WTO Review  (2019).

Malawer, “Trump’s Tariff Wars and National Security — Political and Historical Perspective.”  China and WTO Review (2018).

Malawer, “U.S.-China Litigation in the WTO (2001-2014).International Law Practicum (2014).

 

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