Marble Falls It’s not often all of us in the cheap seats get a ringside view of what big time negotiations look like, especially between nation states, but we’re getting an huge eyeful, courtesy of Trump and his tariff tantrums. The whole world watched with some degree of horror as he huffed and puffed on the bizarrely named “liberation day” when he made his announcements of both specific and across the board tariff levies. The reaction from investors and many other countries, who were shocked at the size and extent of the tariffs, was less horror and more panic, as they unloaded stocks and fled US Treasury bonds, driving up the rates. Less than a day later, Trump blinked, as we all know, and paused many of the tariffs for 90-days, while jacking them up even higher with China and maintaining about 10% across the board. As we’ve noted, he bluffed, and then he blinked.
What’s interesting is how quickly so many have pointed out that the wannabe emperor is wearing no clothes. The Wall Street Journal, especially their editorial and op-ed pages, that are much more under the thumb of their very conservative owner, Rupert Murdock, have been pretty much MAGA all the way. In fairness though, they think Trump and his tariffs are bananas, to put it politely, as they hammer him almost daily on the his financial brinkmanship with the US and world economies. All of which has allowed the WSJ reporters to be more pointed and transparent, even on the front pages, about how clearly Trump has now damaged his bargaining position with other countries thanks to his bluster and then his immediate retreat.
In organizing, we have an expression that goes to the heart of this problem. We talk about people “swallowing the ask.” Usually, we’re referring to the exchange about joining the organization and paying dues, where a leader or organizer undercuts the invitation for someone to join by essentially walking away from the question or providing an excuse for the potential member before they’ve even had a chance to make up their minds. We also quote a lawyer frequently for Muhammad Ali at the time of his Lewiston, Maine first title fight against Sonny Liston, where his attorney negotiating Ali’s payday, win or lose, told Sports Illustrated then that the key was “not to stutter when you ask.”
Trump has done all that and more. His quick U-turn “diminished his credibility as a negotiator.” This is especially true since he had spent weeks claiming he was serious, that we should absorb the pain for long term gain, but then folded at the first shudder of the markets like a cheap suit. Maybe we’re all lucky that he’s now specializing in the “art of the bad deal.” As the Journal points out,
Countries and regions that had declined to escalate and either held their fire, postponed their reaction or announced more moderate countermeasures saw their cautious approach vindicated after the US appeared to blink.
As another commentator speculated,
Our working assumption now will be that, cowed by the market response, Trump will repeatedly extend the ‘pause,’ meaning that this will end up looking a lot like the 10% universal tariff that he campaigned on, said Paul Ashworth, chief North America economist at Capital Economics. In return, other countries will offer minor concessions on their own tariffs and trade practices.
Even while his sycophantic aides are claiming this was always Trump’s strategy, no one is buying that. Worse his unpredictability is still making a yo-yo of the markets, which likely will give him more than a “pause” on all of this mischief and madness. None of this is to say that the we’re on safe and solid ground economically, especially because we seem to be close to a full-blown trade war with China with neither country either blinking, nor seemingly negotiating.
High-low bargaining never works well for unions. Trump might learn that lesson from his bluff and blink, if he bothered. In the meantime, his gyrations reward other countries patience, and on tariff negotiations it’s hard not to conclude, fortunately perhaps, that his bark is worse than his bite.