Trump by name…

We are now only 2 weeks on since the inauguration of Donald Trump as the 47^th President of the United States and I don’t think anyone could have predicted the extreme nature of the proposals he has made since then. Having focused early policy statements on his drive to (Make America Great Again/MAGA), he has quickly moved on to a far more expansionist agenda. As an aside, if you ever want a treatise on ‘greatness’ in America, you should watch a brilliant monologue from Jeff Daniels playing the part of Will McAvoy in a US show called Newsroom, broadcast in 2012, which transformed the show and Daniels’ career.

Having introduced a legislative agenda of major disruptive changes in, immigration, diversity, energy and the tariffs, most of which go against the mood music in most developed economies, Trump, for whom foreign policy has rarely featured high on his list of priorities, has since unleashed pledges to; ‘take back’ the Panama Canal, for Greenland to become part of the United States, for Canada (who have been hit by increases in tariffs) becoming the 51^st state, and most recently the incredibly ambitious objective (I’m being polite here) of the US rebuilding Gaza and for it to be owned by the US. Sounds more he’s trying to do property deal than a serious attempt to make any real difference and is only likely to stir tensions with Hamas not to mention the added problem of the displacement of 2 million Palestinians!

Most of you will know that Trump is the credited author of ‘The Art of the Deal’, a book that was actually ghost written by a man named Tony Schwartz who had been given access to Trump. Prof. David Honig of Indiana University who teaches negotiation describes Trump’s dealmaking being what he calls ‘distributive negotiation’.

Honig states these types of negotiations always have a ‘winner or loser’. This has been how Trump has managed his property portfolio (the dealings of which have culminated in a criminal conviction) where the less he pays he wins, the more he saves he wins and of course the other party loses. Honig surmises that Trump (as the head of the world’s biggest economy) also seeks to manage negotiations on the international stage in the same way.

What Trump seems not to understand is that absolute power is rarely achievable in any negotiation as businesses and countries are always likely to have alternatives, thus having the ability to take their business elsewhere, or in the case of Canada who reciprocated to impose tariffs by way of retaliation. As Honig states ‘negotiations are not binary’, most economies have alternatives to the supply of almost any product or material, hence tariffs are likely to result in countries choosing one of a multitude of other options at their disposal and many businesses will have likely hedged to reduce the supply of goods from the US, based on the outcome of the election.

At Scotwork, we are firmly in the place of what Honig calls ‘integrative bargaining’, which he describes as ‘both sides don’t have a complete conflict of interest’ and ‘where it is possible to reach mutually beneficial agreements, and this is simply not Trump!

Trump is unlikely to change and his rhetoric will continue to raise the hackles of the people of the international partners with whom he is trying to negotiate. I did have a chuckle to myself when I heard he made mention of that fact that other markets don’t buy American cars, that has nothing to do with tariffs, their cars just aren’t very good.