Say I knock on your door and tell you that I’m going to burn your house down. And let’s say you believe I have the capability to do so, making my threat credible. Your first response would be to prioritise what you might try to save from your house before it’s burned down. By making such a threat I put myself in an excellent position to negotiate by pushing you into crisis mode and forcing you to establish priorities quickly. From here, I could back down and say, ‘Well, I won’t burn your house down, but I’ll take all your belongings in your living room.’ You might decide it’s better to surrender your living-room belongings, all of which are replaceable, than to lose your whole house. After that ordeal, I don’t follow through on the threat of arson, but I still make off with the contents of your living room. You might feel like you’ve avoided complete disaster, but you still lost some possessions. This might be a simple illustration, but it reflects President Trump’s basic zero-sum negotiating strategy.
Trump’s strategy was observable in his campaign rhetoric on proposals like the Muslim ban, in his claims that NATO is ‘obsolete’, and in his attacks against trade architecture like the Trans-Pacific Partnership (TPP) and NAFTA. Now that he’s seated at the Resolute desk, we’re seeing it all over again with things like his short, tense phone call with Prime Minister Malcolm Turnbull in which the President considered reneging on an agreement made with the previous Obama administration to resettle detained refugees in the United States, calling it ‘the worst deal ever’.
Trump’s brash style of brinkmanship may have served him well as a businessman in the cut-throat world of New York real estate development, but it won’t work as well in the international arena. Instead of pushing a policy to the limits of safety, Trump rushes himself and his opponents straight to the cliff’s edge. Taking them there without allowing them any time to think might get them to panic and reveal their bottom line. Trump could then walk them back from the brink on his own terms. Such moves could keep his opponents and negotiating partners off-balance.
It’s an effective strategy for Trump, and luckily for him, it’s a game that can be played without finesse. But it’s also risky. If I keep threatening to burn homes down I’ll eventually need to follow through at some point to solve the problem of credibility, a problem which Trump faces in the domestic and international arenas. And doing so could put me at risk. Depending on how well I understand external factors, I could actually be stuck in the house with you when I deliver my threat. I could very well bring myself down with you. That’s one way to resist Trump’s blustering strategy: understanding what he’s actually capable of, trying to contain his threats based on his own limitations, and identifying where he’s politically exposed.
Trump’s negotiating strategy was on display with the TPP. On his first day in office, President Trump followed through on his threat and withdrew the US from the TPP. Since the trade agreement can’t go into effect without both the US and Japan ratifying it, President Trump effectively “burned down the house”. He hasn’t walked away from trade with Japan altogether since the White House has put the offer of a bilateral US–Japan trade deal back on the table. But this outcome is unfortunate for Japan, since it would have to renegotiate a trade deal with a Presidential administration which has championed protecting American jobs and manufacturing and scepticism of international trade. That places political limitations on what Trump could achieve with a bilateral deal which makes progress on difficult issues like agriculture and car manufacturing, which are politically sensitive areas for Japan when it comes to trade.
If Trump is indeed applying that strategy to promote his preference for bilateral trade deals in Asia, then it might be best for Japan to deny the new president this early victory and resist his transactional approach to diplomacy. Japan and any other US partners in Asia should shun bilateral proposals. If there’s little point in the TPP without US involvement and leadership, a long-term strategy will be to wait for a change in the presidential administration in Washington, which could see the US re-join the partnership. As Asia remains the driver of global economic growth, it has time on its side and perhaps the TPP might still prevail in a post-Trump world.
Policymakers in Asia should be wary of Donald Trump’s “burn down the house” strategy as he’s proving time and time again that he doesn’t view negotiating as a win-win game. His pathology and approach to negotiations demand a loser, making it hard to see bilateral negotiations with the Trump administration delivering a satisfying outcome. Rather than a mark of a brilliant deal maker, Trump’s negotiating tactics are the hallmark of an entertainer and a blusterer. It’s a destructive strategy and in the long term, it will hurt America’s credibility in the Asia–Pacific region.