Trump Has Some Basic Knowledge About Negotiation; Maybe Boris Johnson Does Too

Say what you will about Donald Trump, here’s one thing you have to give him: he has some basic knowledge — or maybe it’s just instinct — of how to go about negotiating a deal. This is in great contrast to others you see on the world stage, including people in the office of U.S. President or British Prime Minister. You would think that knowing the fundamentals about how to negotiate with other world leaders would be a basic requirement for either of those jobs, but of course that is not true. The voters don’t know much about this subject, and can’t be expected to. As to the U.S. presidency, other than Trump, I can’t think of any other candidate who has even put forward high-level negotiating skills as part of the campaign pitch.

I’m not saying that I agree with every tactic that Trump has employed in his various negotiations as President, let alone with all of the goals that he has pursued. Rather, I’m talking here only about basic negotiating strategy, where at its core there is only one point that is important among all others. Here it is: If you want to get your best deal in a negotiation, you must be willing to walk away, and you must demonstrate that willingness to your negotiating counterparty.

Although I could give many examples of this principle from a career in the litigation business, the most dramatic instance I have ever experienced came once in my personal life. Many years ago, Mrs. MC dragged me along to an oriental rug store, where a friend of hers had shown her a certain rug in which she became interested. The friend said that at this store, the prices were “very negotiable.” I was there because as a lawyer I supposedly had great negotiating skills. But after some extensive back and forth on the price, using my best guile and artifice, I had made almost no progress with the salesman; and I thought that the price demanded was ridiculous. Finally, I had had enough. I said, “Sorry, but we’re not doing this.” We got up and headed for the exit. Nothing about this was an act. It was just too expensive, and I wasn’t going to do it.

Just as we got to the door, the salesman rushed up to us and offered a further a further price reduction of about 30% beyond what had already been offered. After some further minimal back and forth, he got the deal. Meanwhile, for me, lesson learned. The guile and artifice had almost nothing to do with the result, and the manifest willingness to walk away, almost everything.

Now consider Barack Obama negotiating the Iran nuclear deal, or the Paris climate accord. The first thing he did in both instances was make absolutely clear to everyone in the world that he was totally committed to reaching a deal, and would never under any circumstances walk away. I’m not an expert on the Iran nuclear deal, but I do know all the details of the Paris climate accord. It is beyond embarrassing that anyone could ever have negotiated this on behalf of the United States. Even if you believe that world CO2 emissions are somehow causing a climate crisis, do you think that this deal has anything to do with actually reducing world CO2 emissions or saving “the climate”? Don’t be ridiculous. Once the U.S. committed to a deal no matter what, then the rest of the world just ganged up and took every possible advantage. China, India, Indonesia, Africa — they get to further increase emissions without limit. And the U.S. hobbles its economy with emissions restrictions and forks over ten of billions annually to third world kleptocrats, supposedly for something to do with “climate,” but realistically to be used to beef up the palace guards and the Swiss bank accounts. When you go in committed to doing a deal no matter what, that’s what you come out with.

Now consider the Brits trying to negotiate their way out of the European Union. Of course the position of the great and the good on the British side has been that we are absolutely committed to doing a deal. Unfortunately, under those circumstances there is no likelihood that the EU will make any meaningful concessions whatsoever. Two years in, Theresa May has gotten nowhere. Now we’re about to get Boris Johnson. According to Reuters, July 21:

Johnson has said he would ramp up preparations for a no deal to try to force the EU’s negotiators to make changes to the agreement that Prime Minister Theresa May sealed with Brussels and UK lawmakers voted down three times.

In other words, we finally have a breath of basic competence. Needless to say, the great and the good are horrified. On Sunday, Chancellor of the Exchequer Philip Hammond threatened to quit:

British finance minister Philip Hammond said on Sunday he would resign if Boris Johnson became prime minister because he felt unable to support a leader happy to take the country out of the European Union without a deal.

He’s Chancellor of the Exchequer, and yet he doesn’t seem to have to most basic understanding of what is going on. Well, at least he’s not President of the United States. There is zero chance that a successful Brexit deal can be negotiated without at least some degree of brinksmanship.

Meanwhile, we have Trump regularly stomping away from things like North Korea nuclear negotiations, or China trade negotiations. It often seems like a crass and crude approach. And I have no idea whether the ultimate results achieved will be anything significant. But in fact this is a demonstration of the very most basic competence in this type of negotiation.