President Donald Trump has signaled plans to end tentative trade agreements should his tariff policy be struck down.
In an Oval Office press conference on Wednesday, Trump warned a lack of tariffs would destroy leverage the administration had to strike deals with trade partners like South Korea and the European Union.
“Our country has a chance to be unbelievably rich again. It could also be unbelievably poor again. If we don’t win that case, our country is going to suffer so greatly, so greatly,” Trump said.
“We made a deal with the European Union where they’re paying us almost a trillion dollars,” he added. “And you know what? They’re happy. It’s done. These deals are all done, I guess we’d have to unwind them.”
The White House did not respond to Fortune’s request for comment.
Will Trump really lose leverage in trade negotiations?
Trump’s indication he would dissolve his trade relationships in the case his tariffs were struck down is a hollow one because the agreements he’s made aren’t legally binding deals, according to Brett House, professor of professional practice at Columbia Business School.
“These are truly nothing more than ad hoc letters of intent,” House told Fortune. “So to say that much would be lost is vastly overstating the quality of those very tentative, very cursory, and very superficial agreements.”
“If anything, countries that were interested and willing to negotiate comprehensive, legally binding trade agreements with the U.S. now are less likely to do so because they can see the good word of the United States—with countries where agreements already exist—is cast aside capriciously,” House said.
