The president doesn’t understand basic contract principles, and he doesn’t appreciate having that pointed out thank you
Donald Trump knows China. “I’ve read hundreds of books about China over the decades,” he said in his opus The Art of the Deal. “I know the Chinese. I’ve made a lot of money with the Chinese. I understand the Chinese mind.”
He’s applied this mastery of a country comprising 1.39 billion people and 56 different ethnic groups to a trade deal which is in the offing, with memorandums of understanding (MOU) being worked on in areas including agriculture, services, tech transfer, currency and intellectual property. Trump, however, is not a fan of MOUs.
“I don’t like MOUs because they don’t mean anything,” he said during a presidential lecture in front of trade officials and Chinese vice premier Liu He. “To me, they don’t mean anything.”
That is, in a very literal sense, not true. Robert Lighthizer, the White House’s top negotiator, made that clear, turning to the press to clear up any misunderstanding: “An MOU is a contract, it’s the way trade agreements are generally viewed… an MOU is a binding agreement between two people. It’s detailed. It covers everything in great detail. It’s a legal term. It’s a contract.”
“By the way, I disagree,” Trump shot back. Liu burst out laughing.
— Bloomberg Economics (@economics) 23 February 2019
By way of compromise, Lighthizer suggested that they just call the exact document they had a trade agreement rather than an MOU. “Good, I like that term much better,” Trump nodded.