Trump Trade War

[Holman]

Given his penchants both for projection and for calling his opponents "low-IQ people"... well, do the math.

[Kraken]

Here's a good (and un-Facebook-like) essay that's rattling around Facebook tonight. Reproduced entirely because linking to FB is futile.

Best, most cogent and simple (in the sense of elegant simplicity) explanation into the massively destructive negotiating processes of our president by Prof. David Honing of Indiana University.

“I’m going to get a little wonky and write about Donald Trump and negotiations. For those who don't know, I'm an adjunct professor at Indiana University - Robert H. McKinney School of Law and I teach negotiations. Okay, here goes.

Trump, as most of us know, is the credited author of "The Art of the Deal," a book that was actually ghost written by a man named Tony Schwartz, who was given access to Trump and wrote based upon his observations. If you've read The Art of the Deal, or if you've followed Trump lately, you'll know, even if you didn't know the label, that he sees all dealmaking as what we call "distributive bargaining."

Distributive bargaining always has a winner and a loser. It happens when there is a fixed quantity of something and two sides are fighting over how it gets distributed. Think of it as a pie and you're fighting over who gets how many pieces. In Trump's world, the bargaining was for a building, or for construction work, or subcontractors. He perceives a successful bargain as one in which there is a winner and a loser, so if he pays less than the seller wants, he wins. The more he saves the more he wins.

The other type of bargaining is called integrative bargaining. In integrative bargaining the two sides don't have a complete conflict of interest, and it is possible to reach mutually beneficial agreements. Think of it, not a single pie to be divided by two hungry people, but as a baker and a caterer negotiating over how many pies will be baked at what prices, and the nature of their ongoing relationship after this one gig is over.

The problem with Trump is that he sees only distributive bargaining in an international world that requires integrative bargaining. He can raise tariffs, but so can other countries. He can't demand they not respond. There is no defined end to the negotiation and there is no simple winner and loser. There are always more pies to be baked. Further, negotiations aren't binary. China's choices aren't (a) buy soybeans from US farmers, or (b) don't buy soybeans. They can also (c) buy soybeans from Russia, or Argentina, or Brazil, or Canada, etc. That completely strips the distributive bargainer of his power to win or lose, to control the negotiation.

One of the risks of distributive bargaining is bad will. In a one-time distributive bargain, e.g. negotiating with the cabinet maker in your casino about whether you're going to pay his whole bill or demand a discount, you don't have to worry about your ongoing credibility or the next deal. If you do that to the cabinet maker, you can bet he won't agree to do the cabinets in your next casino, and you're going to have to find another cabinet maker.

There isn't another Canada.

So when you approach international negotiation, in a world as complex as ours, with integrated economies and multiple buyers and sellers, you simply must approach them through integrative bargaining. If you attempt distributive bargaining, success is impossible. And we see that already.

Trump has raised tariffs on China. China responded, in addition to raising tariffs on US goods, by dropping all its soybean orders from the US and buying them from Russia. The effect is not only to cause tremendous harm to US farmers, but also to increase Russian revenue, making Russia less susceptible to sanctions and boycotts, increasing its economic and political power in the world, and reducing ours. Trump saw steel and aluminum and thought it would be an easy win, BECAUSE HE SAW ONLY STEEL AND ALUMINUM - HE SEES EVERY NEGOTIATION AS DISTRIBUTIVE. China saw it as integrative, and integrated Russia and its soybean purchase orders into a far more complex negotiation ecosystem.

Trump has the same weakness politically. For every winner there must be a loser. And that's just not how politics works, not over the long run.

For people who study negotiations, this is incredibly basic stuff, negotiations 101, definitions you learn before you even start talking about styles and tactics. And here's another huge problem for us.

Trump is utterly convinced that his experience in a closely held real estate company has prepared him to run a nation, and therefore he rejects the advice of people who spent entire careers studying the nuances of international negotiations and diplomacy. But the leaders on the other side of the table have not eschewed expertise, they have embraced it. And that means they look at Trump and, given his very limited tool chest and his blindly distributive understanding of negotiation, they know exactly what he is going to do and exactly how to respond to it.

From a professional negotiation point of view, Trump isn't even bringing checkers to a chess match. He's bringing a quarter that he insists of flipping for heads or tails, while everybody else is studying the chess board to decide whether its better to open with Najdorf or Grünfeld.”

— David Honing

[GreenGoo]

Once, years ago, for various reasons, I became interested in learning about negotiating. It was purely hobby interest, because exactly like drumpf and anyone who has nothing but the most simplistic understanding of negotiating (like, for example, Rip), I couldn't conceive of anything beyond "give me what I want or I'm walking away". I knew that couldn't be all there was to it, so I starting researching.

Now with some education under my belt, it infuriates me when Drumpf calls himself a master negotiator or even adequate at deal making. He is *TERRIBLE* at it. He's managed to turn a life time's potential massive fortune into a life time's worth of small fortune. He's bankrupted himself multiple times. He's unable to get any financing that isn't gangster based.

So I don't need to know how terrible he is, or the specifics of why he's so bad. It *is* interesting to hear a professional academic analyze what little there is to analyze about drumpf, but it's not eye opening or surprising.

It doesn't matter though, people will continue to believe that buying a used car in a sitcom is the epitome of negotiating skill, and drumpf has that covered to a "T".

Thanks for the post. Drumpf might as well call himself the best baseball player of all time. He's as good a ball player as he is a deal maker.

edit: Just want to mention how laughable drumpf is when he does something punitive, then whines like a little bitch about how unfair it is when the recipient does something in response.

[Kraken]

Having worked as a retail buyer for 10 years, and having bought several new cars over the years, taught me long ago that the best negotiations -- even in simple distributive transactions -- are win/win. Adversaries share one overarching goal: getting to Yes. The optimal outcome emerges when two skilled parties understand that they both ultimately want the same thing. Each party has to concede something to find mutually advantageous price or terms...that is, the buyer will pay a little more than he wanted to, and the seller will earn a little less than she would have liked, but the goods changed hands to everybody's benefit. Each one suspects that they might have given up a little more than they needed to, but each knows that they extracted concessions, too, and is happy with their resulting purchase or paycheck. Negotiating is actually enjoyable if you approach it with the awareness that your adversary is simultaneously your partner.

Negotiating with Trump is like playing chess with a pigeon: He's going to knock over the pieces, crap all over the board, and strut around like he won. The only way to win is not to play. Unfortunately, that option is constricted while he sits in the Oval Office. While he was a two-bit real estate grifter anyone with a lick of sense could walk away, and his marks were limited to those who didn't know his reputation or were shadier than he is.

[GreenGoo]

I'm sure not coincidentally, Getting to Yes is the name of a book on negotiation. I can't imagine you're not familiar with it.

One of the things that particular book taught me is to look outside the box at things someone might be interested in that you are not, even if they are unrelated to the negotiation. Sometimes those things are obvious, like free under coating. Sometimes they are less obvious, like being able to pick up the car 6 weeks from now at a dealership on the other side of the city/state/country.

There are so many other negotiations in a person's life that are far more interesting, flexible and with more negotiable factors than buying a car, I hate using it as an example, but everyone is familiar with the concept.

edit: I consider myself a complete amateur at negotiation. It's not in my blood, and I'm not good at it. It is fascinating though.
edit2: Your comment about your opponent also being your partner is bang on. The goal is to get both sides to walk away happy with the deal. In some cases, like the splitting a pie concept, there isn't much room to work with, but in other cases, realizing that one person really loves the crust while the other thinks it's the least enjoyable thing about pie can turn even splitting pie into a win/win, rather than a win/lose.

[GreenGoo]

One last thing. The analysis of Drumpf's negotiating ability above is completely bang on for anyone with even an inkling of how to negotiate. Which is why when Rip and the blogosphere try to tell us he's not fucking up, is insane. Economics is not politics. Those soybean orders are not coming back until Drumpf is gone, or if they do, Drumpf will have caused increased harm in some other part of the economy/geopolitical arena.

Drumpf is EQUALLY BAD at everything else. There is NOTHING drumpf is good at except playing to his base. He is causing harm every time he participates personally in anything. Whether that's Harley Davidson manufacturing, elections in Montana, sanctions on his allies or the geopolitical arena.

He might not be the worst president evar! as far as we can tell, yet, his ability to do harm is unparalleled in that he is ignorant, unskilled, arrogant and incapable of taking advice that were unfathomable in a president before this.

Every single person who defends drumpf is causing harm to your country. Even the low information otherwise reasonable middle aged white dudes who think that it can't be as bad as the media says it is, so it isn't.

He's not inherently evil or anything, he's just really, really stupid. And thank god for that. Smarter, more malevolent person, say, Putin for example, could burn the country to the ground in the current political climate, instead of just seriously wounding it.

[Paingod]

There is NOTHING drumpf is good at except playing to his base.

And that is all that matters. He's got voters like msduncan, em2naught, and RIP -along with millions of other like-minded people- in his pocket.

It doesn't matter how poorly he performs in reality because he's always ready to blame everyone else for any problem that comes up. He keeps a flowing roster of scapegoats and strawmen around at all times... and his supporters eat it up.

[LawBeefaroni]

Trump has raised tariffs on China. China responded, in addition to raising tariffs on US goods, by dropping all its soybean orders from the US and buying them from Russia. The effect is not only to cause tremendous harm to US farmers, but also to increase Russian revenue, making Russia less susceptible to sanctions and boycotts, increasing its economic and political power in the world, and reducing ours.

Russia wins. I'm detecting a pattern here...

[LordMortis]

Trump has raised tariffs on China. China responded, in addition to raising tariffs on US goods, by dropping all its soybean orders from the US and buying them from Russia. The effect is not only to cause tremendous harm to US farmers, but also to increase Russian revenue, making Russia less susceptible to sanctions and boycotts, increasing its economic and political power in the world, and reducing ours.

Russia wins. I'm detecting a pattern here...

I'm fairly certain I have been arguing that and losing due to, conversations being shut down since "they're easy to win". And yet, support continues on economic grounds. I was mildly surprised until recently that people were sacrificing their own economic interests in the name of Trump's economy but that doesn't surprise me any more. Some sense of patriotism has run amuck. Some vague ideal that comes down to the desire to have guns to shoot people. First it was to save ourselves from government but since 2016, it's to protect this government.

[ImLawBoy]

Also, off the books "tariff":

The Chinese embassy in Washington has issued a warning to its citizens traveling to the United States as trade tensions intensify between the two countries.

Chinese tourists were warned of dangers such as costly medical bills, the possibility of gun violence and robberies, seizures by customs agents and natural disasters.

"Public security in the United States is not good," said an embassy statement published last week. "Cases of shootings, robberies, and theft are frequent."

Right at the start of peak tourist season here.

Next up, convince Chinese consumers to Buy Chinese.

Not that it matters, but the US State Dept has done this for decades, i.e use tourist warnings as political leverage (punishment/reward) for many countries (mostly developing).

I don't think the point is that China is wrong to do it. It's that it's another unintended economic consequence of Trump's half-assed trade war.

[GreenGoo]

I don't think the point is that China is wrong to do it. It's that it's another unintended economic consequence of Trump's half-assed trade war.

No one should blame (or expect otherwise) a country for acting in its own self interests (Drumpf, I'm looking at you here). What's noteworthy is that Drumpf is acting against the US's interests by encouraging China to act in it's own self interests at the cost of the US's interests.

He's making deals that seem to be beneficial for everyone *except* the US, by taking away the opportunity for a better deal with the US.

People want to (well, used to want to) do business with the US. The idea that people would bypass the US to do business with Russia should be eye-fucking-opening for even the most stalwart partisan.

edit: If/when Canada starts doing (more) business with Russia and less with the US is when you should probably "remove" drumpf from office. Most Canadians I know (and there have been a few man on the street pieces too) can't imagine not doing business with the US. We want to give you our money. Don't fuck this up. We're your second biggest trade partner for fuck's sake, and you're already chasing off your biggest.

[Paingod]

As long as Trump thinks every negotiation needs to have a winner, and if he's not the winner then it's a broken/bad/flawed/hostile situation, the US cannot effectively trade. Trade requires give and take on both sides. Everyone wins, because you strike a deal that benefits all sides. Trump needs to see America win. We can't because it's not something like negotiating the sale of a building. It's a long-term mutually beneficial agreement.

I feel badly for everyone dealing with the very stable genius who can't see past the end of his nose.

I beg all of you in different countries to please be patient with us. Give us until the next presidential election to get our shit sorted. If Trump gets elected again, feel free to cut all ties and move the rest of the world on without us as the US is then a lost cause.

[LawBeefaroni]

Some vague ideal that comes down to the desire to have guns to shoot people. First it was to save ourselves from government but since 2016, it's to protect this government.

The irony, of course, is that Trump is the one most likely to disarm the citizenry.

He's used homeland security as an excuse to tariff Canada, ban travel, and kidnap toddlers. Like he can't see a way to confiscate firearms. I mean guns have no legitimate purpose unless they are used to in security details to protect the elite. Or for shooting endangered big game.

The notion of using small arms to fend off a tyrannical government is fake news.

At the very least we'll have this:

Russian citizens over 18 years of age can obtain a firearms licence after attending gun-safety classes and passing a federal test and background check. The licence is for five years and may be renewed. Firearms may be acquired for self-defense, hunting, or sports activities. Carrying permits may be issued for hunting firearms licensed for hunting purposes. Initially, purchase is limited to smooth-bore long-barred firearms and pneumatic weapons with a muzzle energy of up to 25 joules (18 ft⋅lbf). After five years of shotgun ownership, rifles may be purchased. Handguns are generally not allowed. Rifles and shotguns with barrels less than 500 mm (20 in) long are prohibited, as are firearms that shoot in bursts and have more than a 10-cartridge capacity. Suppressors are prohibited. An individual cannot possess more than ten guns (up to five shotguns and up to five rifles) unless they are part of a registered gun collection.

[$iljanus]

You know, Vladimir is a thug but he always has a good photo!

[GreenGoo]

You know, Vladimir is a thug but he always has a good photo!

I was having a discussion with my 13 year old about Putin and he has this epiphany. Putin is like Genghis Khan. A terrible tyrant that history will record as being an amazingly good terrible tyrant.

I couldn't agree more. Academically, it's hard to argue that Putin isn't amazing at what he does. He might be the smartest, subtlest, most powerful geopolitical individual of our time. I joke about Machiavelli, he's living it. He's in the middle of taking down America without ever firing a shot, or even being in open conflict.

Hollee sheet.

[Jeff V]

Oh no, not badger hair!!!

The price of merkins is about to skyrocket.

[GreenGoo]

I'm just excited for you and your government because of all that new cash flowing into government coffers. Should help offset the tax breaks you guys got last year.

Winning is easy.

[Isgrimnur]

Texas

Run down the list of commodities China has already penalized, and you’ll find it tallies closely with the goods for which Texas is a top exporter: cotton, sorghum, rice. “We’ve seen an effect on grain sorghum. We’ve seen an effect on cotton prices. And of course all to the negative,” says Russell Boening, president of the Texas Farm Bureau.

The pain is likely to spread throughout rural communities, including large parts of Fort Bend and Brazoria Counties. “If the farmer has less money to spend, that means there’s less money to spend at an equipment dealer, at a fertilizer dealership, car dealerships. It definitely has a domino effect,” Boening says.

The Farm Bureau president says the U.S. tariffs on Chinese steel are hurting Texas farmers as well, by driving up the cost of agricultural machinery and parts.

[LordMortis]

Well one member of the GOP is trying to stand up (for Congress) to the president. That brings the total to.... one

https://reason.com/blog/2018/07/12/rep- ... can-leader

I can’t relate to why they’d want to be congressional leaders if all they intend to do is outsource their jobs to the president.

The nonbinding vote is, for now, mostly meaningless. Still, the bipartisan support for limiting the president's ability to abuse the Section 232 tariff authority is the first sign that Republicans in Congress might be willing to stand up to Trump as he continues escalating an unnecessary trade war.

[Isgrimnur]

Politico

Chinese telecom giant ZTE is no longer subject as of Friday to the Trump administration’s April denial order banning it from U.S. operations for seven years.

The department lifted the ban on ZTE today after the company put $400 million in escrow, to be drawn by the U.S. if it violates a June agreement with Commerce.

"While we lifted the ban on ZTE, the Department will remain vigilant as we closely monitor ZTE’s actions to ensure compliance with all U.S. laws and regulations,” Commerce Secretary Wilbur Ross said in a statement.

ZTE had said the April denial order would put it out of business. President Donald Trump in May urged his Commerce Department to come up with another way to punish ZTE, which was found to be illegally selling to Iran and North Korea. That alternative approach included a $1 billion fine, a management shake-up and an embedded compliance team to ensure it abides by the agreement.

Several lawmakers see deeper problems with ZTE and cite it as a national security threat due to possible ties with the Chinese government.

[GreenGoo]

Drumpf has got to be a (poorly trained) foreign agent. A Tom Clancy novel wouldn't be this overt. We'll tariff anything that might help us economically, but security issues? Welcome to the US!

[trendingweb]

It's just spam anyway!

[Sepiche]

Drumpf has got to be a (poorly trained) foreign agent. A Tom Clancy novel wouldn't be this overt. We'll tariff anything that might help us economically, but security issues? Welcome to the US!

Guessing why Drumpf does something is like throwing darts at a spinning wheel divided into: corruption, incompetence, racism, and treason.

[Max Peck]

Drumpf has got to be a (poorly trained) foreign agent. A Tom Clancy novel wouldn't be this overt. We'll tariff anything that might help us economically, but security issues? Welcome to the US!

Guessing why Drumpf does something is like throwing darts at a spinning wheel divided into: corruption, incompetence, racism, and treason.

Hey, China paid good money for Trump's permission to allow ZTE to subvert the US telecom infrastructure. It's refreshing to see Trump actually following through on a deal for a change.

[malchior]

FFS. And when we lose Trump will use it to hammer on the WTO as biased against us. I hate that this is so damn predictable.

[GreenGoo]

[Jolor]

And the distraction begins.

[Carpet_pissr]

And the distraction begins.

Which fuck up is the distraction? There are so many I'm having trouble keeping up.

[Isgrimnur]

And the distraction begins.

Which fuck up is the distraction? There are so many I'm having trouble keeping up.

If you can't dazzle them with brilliance, baffle them with bullshit. Dunning-Kruger makes him think his bullshit is brilliance, however.

[Pyperkub]

Remember that the justification for these tariffs is National Security:

Trump weighs in on the trade war with China
Trump weighs in on the trade war with China
7 Hours Ago | 04:02

President Donald Trump has indicated that he is willing to slap tariffs on every Chinese good imported to the U.S. should the need arise.

"I'm ready to go to 500," the president told CNBC's Joe Kernen in a "Squawk Box" interview aired Friday.

The reference is to the dollar amount of Chinese imports the U.S. accepted in 2017 — $505.5 billion to be exact, compared with the $129.9 billion the U.S. exported to China, according to Census Bureau data.

[Skinypupy]

Oh, for fuck's sake.

Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that - and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!

[hepcat]

Why do I see Chip Diller when I read that tweet?

[Captain Caveman]

This is going well.

[hepcat]

Remember when one of the GOP's biggest goals was a reduction in our national debt?

I sometimes feel like they're now Democrats and the Democrats are now Republicans.

[Holman]

Remember when one of the GOP's biggest goals was a reduction in our national debt?

No.

That's just how they talk when they're trying to dismantle the social safety net.

[Daehawk]

https://reason.com/blog/2018/07/17/whir ... ld-protect

Whirlpool was happy with Trump helping them make money. Then he started tariffs and they lost their bonus and more. Now they are losing big time and passing it on to consumers.

[Kraken]

Remember when one of the GOP's biggest goals was a reduction in our national debt?

No.

That's just how they talk when they're trying to dismantle the social safety net.

Stereotypically Democrats have been the "tax and spend" party because they at least make an honest effort to pay for their programs. Boo! Taxes bad!

[Paingod]

https://reason.com/blog/2018/07/17/whir ... ld-protect

Whirlpool was happy with Trump helping them make money. Then he started tariffs and they lost their bonus and more. Now they are losing big time and passing it on to consumers.

This is why I love it when anyone says "This is going to hurt businesses!" - No. Not really. They're going to look at a 10% cost increase and then glance at the consumer's wallet for a millisecond before handing that cost right back down the line. The business is fine, and heck, if the 10% cost increase goes away, maybe they'll reduce pricing by 1% so we can see the difference, keeping the extra 9% for themselves.

[Smoove_B]

This is going well.

12 billions in aid, apparently.

I guess because I don't play 37 dimensional chess, I don't understand what's happening here.

[Isgrimnur]

Higher prices reduces demand. And pushing prices higher to offset lower demand just makes it worse.