Politics & Policy

Donald Trump, the Lose-Lose Negotiator

Consulting the classic text on “win-win” negotiation to see what a better trade policy might look like.

No.

Photographer: Mandel Ngan/AFP/Getty Images

President Donald Trump’s approach to negotiations, on trade in particular, has had me scratching my head a lot lately. In an attempt to understand it and its likely consequences better, I finally sat down this week and read the classic 1980s book on deal-making.

No, not 1987’s “Trump: The Art of the Deal.” I mean “Getting to Yes,” the 1981 guide to “win-win” negotiation by Roger Fisher and William Ury that was still hitting business bestseller lists in the 1990s and 2000s and came out in a third edition in 2011. The book was a product of the Harvard Negotiation Project that law professor Fisher, anthropologist Ury and then-just-out-of-college Bruce Patton — whose name was added to the cover for the second edition in 1991 — had founded in 1979 as an interdisciplinary effort to improve the theory and practice of negotiation. 1

So while “Getting to Yes” and “win-win” both sound cringe-inducingly upbeat and business-guru-ish, the book actually offers sober, straightforward, much-tested advice on how to move away from “positional” negotiation that ends in besting or giving in to your adversary (or, more likely, splitting the difference and going away unhappy) and toward “principled” negotiation. What does this entail?

It suggests that you look for mutual gains whenever possible, and that where your interests conflict, you should insist that the result be based on some fair standards independent of the will of either side. The method of principled negotiation is hard on the merits, soft on the people. It employs no tricks and no posturing.

“No tricks and no posturing” does not sound like the Donald Trump style of negotiation. Still, let’s go through the four key steps of the “Getting to Yes” method and see how they compare to Trump’s approach. They are:

  1. Separate the people from the problem.
  2. Focus on interests, not positions.
  3. Invent options for mutual gain.
  4. Insist on using objective criteria.

Trump is not awful on the first. Yes, he’s big on name-calling, but he doesn’t seem to take it seriously and, as he is apparently planning to make clear with North Korea’s Kim Jong Un in Singapore next week, he’s perfectly willing to turn around and talk with those with whom he’s been trading insults.

The part about “using objective criteria” seems problematic given how much Trump hates being hemmed in by objective reality. The big issues, though, are with numbers 2 and 3. Trump’s fundamental approach — especially on trade — is zero-sum. As economic journalist Adam Davidson put it more than two years ago:

His whole worldview is based on a rent-seeking vision of the economy, in which there’s a fixed amount of wealth that can only be redistributed, never grow. It is a world­view that makes perfect sense for the son of a New York real estate tycoon who grew up to be one, too. Everything he has gotten — as he proudly brags — came from cutting deals. Accepting the notion of a zero-sum world, he set out to grab more than his share.

Or as Trump himself put it in a 2007 book:

You hear lots of people say that a great deal is when both sides win. That is a bunch of crap. In a great deal, you win — not the other side. You crush the opponent and come away with something better for yourself.

I don’t believe that Trump truly thinks he can “crush” everyone he deals with — one cannot put together a nearly five-decade business career, even as checkered a one as his — with that attitude. But he does think it’s crucial to be perceived as winning, and he does tend to frame the outcomes of negotiations as binary. In a such a contest, there is no win-win solution that serves both sides’ interests, just a winner and a loser (or an unsatisfactory draw). There are no interests, just positions. This may be a fair depiction of how some parts of the New York City real estate world work. It definitely describes electoral politics, a field in which Trump scored a famous victory in 2016.

Trade, though, is the quintessential win-win endeavor. When you buy something you want from someone who can make it more efficiently than you can, you leave both yourself and the other person better off. This doesn’t mean more foreign trade always leaves every individual in every nation better off, or that nations can’t sometimes use restrictions on trade to gain economic or military advantage. Free-trade boosters too often gloss over these complications. But trade is emphatically not zero-sum. Talking about it in terms of winning and losing, and using trade deficits and surpluses to keep score, as Trump does, almost completely misses the point.

Along the same lines, a trade war that decreases overall trade volumes — which is what the Trump administration appears to have embarked upon — is highly unlikely to produce any winners in absolute terms, although there may be relative winners. As Australian National University economists Warwick J. McKibbin and Andrew Stoeckel concluded after an economic modeling exercise last year:

Under a trade war scenario, all countries are worse off, some more than others due to their trade exposure. The losses to China, Germany and ‘other Asia’ are some three times larger than for the US.

The U.S. wins! Except that it’s still poorer than if it hadn’t started the trade war in the first place, and has in the process alienated the leaders of just about every important economy on Earth. Also, in the McKibbin-Stoeckel model, the combined impact of Trump’s trade and fiscal policies widened the U.S. trade deficit substantially — and the deficit has in fact grown since Trump took office last year. So that’s awkward.

It’s possible, of course, that the administration’s brinkmanship on trade is simply a bargaining tool that will eventually result in great deals that serve American interests. It would be a lot easier to believe that, though, if Trump had ever coherently defined what those interests are. His focus to date has been almost entirely on positions, not interests.

My own sense is that far from making what President Trump calls “bad deals,” American trade negotiators have in recent decades actually done a great job of defending the interests of large U.S.-based corporations. The problem is that as corporations have globalized, domestic inequality has grown, and China has risen as a major new geopolitical competitor, those interests have grown ever less consonant with those of the American people. Reexamining and redefining the American interest in light of this divergence could be a great national exercise, and one that would probably lead to a better international trading regime. The president deserves some credit for having given impetus to such a discussion, but I’m going to go out on a limb here and say that he is assuredly not the person to lead it. He’s too busy looking for opponents to crush, or at least be perceived as having crushed.

Perhaps the most important section of “Getting to Yes,” given current events, is the chapter on what to do “when the other side won’t play” — when your adversary keeps posturing and positioning instead of looking for shared interests. The advice is:

Do not push back. When they assert their positions, do not reject them. When they attack your ideas, don’t defend them. When they attack you, don’t counterattack. Break the vicious cycle by refusing to react. Instead of pushing back, sidestep their attack and deflect it against the problem.

This “negotiation jujitsu” — which apparently involves asking lots of questions and tolerating long, awkward pauses — sounds like it takes a lot of patience. For domestic adversaries who hope to best Trump in the zero-sum electoral arena, it’s probably not the best approach. For U.S. allies and those here who wish to steer discussions on trade and other matters in a more constructive direction, though, it may be the only win-win option on the table.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

  1. The Harvard Negotiation Project spawned the by-this-point-better-known Program on Negotiation at Harvard Law School, which offers classes and produces teaching materials on negotiations.

To contact the author of this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor responsible for this story:
Brooke Sample at bsample1@bloomberg.net

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