How to try and negotiate with Donald Trump

Bangkok Post

7 days ago

Since Donald Trump returned to the White House in January, it has been virtually impossible to keep up with all the extreme measures, incendiary rhetoric, personnel changes, policy reversals, and breaches of rules and norms, from intelligence leaks to defiance of court orders. That is by design: like European fascists in the twentieth century, Mr Trump knows that it is far easier to manipulate and suppress an overwhelmed, divided, and disoriented public than an informed, engaged, and assured one.
The relentless stream of declarations, policy U-turns, and legal violations confuses Mr Trump's opponents, making it difficult to devise a clear strategy for resisting him. And the flood of often-false or misleading information, combined with continued appeals to popular grievances, prevents Mr Trump's supporters from recognising that he is often actively working against their interests.
The international community, too, has been struggling to figure out how to respond to Mr Trump's behaviour, from his bombing of Iranian nuclear sites to his rejection of multilateral agreements. When it comes to tariffs, however, the path forward should be clear.
On April 2, Mr Trump announced "reciprocal" tariffs on countries running trade surpluses with the United States. But on April 9 -- less than 24 hours after the tariffs took effect -- he announced a 90-day "pause", during which affected countries were supposed to reach new trade deals with the US. True to form, the Trump administration has just moved the deadline again: now, countries apparently have until Aug 1.
Mr Trump's tariffs defy economic logic. A well-established theoretical framework, based on centuries of evidence, explains why international trade is fundamentally a win-win proposition: each country can produce and sell goods and services in the fields where it has a comparative advantage.
Many factors can contribute to that advantage, from demographics to natural-resource endowments to technological innovation. Japan is better equipped than most other countries to produce and export high-quality cars, thanks to decades of technological development and trust-building in foreign markets. When everyone is making the most of their comparative advantages, living standards rise everywhere. The Trump administration, however, treats trade like a zero-sum game: if other countries are benefiting, then the US must be losing. Mr Trump hopes that by weaponising tariffs, he will secure "victories" for US industry. The problem is that the added costs fall primarily on domestic importers and are then passed on to consumers. The result is reduced access to foreign goods, weaker domestic competition, and higher prices.
But Mr Trump either does not understand this, or simply does not care, and his supporters remain in thrall to his "Make America Great Again" myth-making. So, other countries feel considerable pressure to strike timely deals with his administration. They must resist that pressure. As game theory indicates, patience is crucial for finding cooperative solutions to seemingly intractable conflicts -- especially when the uncooperative party is showing impatience. Countries should also remain open to the possibility that trade negotiations can bring mutual benefits, particularly if their scope is broadened beyond industrial products, to include agricultural products and even security issues.
Trade talks between the US and Japan are a case in point. So far, bilateral negotiations have focused not only on automobiles but also on rice, an industry that Japan protects with tariffs and subsidies. But reports of excess production capacity suggest that these protections are not doing Japan much good. Add to that high prices, and Japan has good reason to liberalise the sector, quite apart from facilitating a trade agreement with the US.
Mr Trump's tactics have already motivated Europe to take responsibility for its own security. At last month's Nato summit, member countries committed to increasing their defence spending to 5% of GDP by 2035. Incorporating defence considerations into trade negotiations could prove constructive.
Japan's share of defence spending was affected by the US occupation policy after World War II, which was intended to prevent Japan from becoming a major military power again. Now confronted with the military might of neighbouring China and North Korea, and with new demands for increased defence spending from the US, the Japanese will need to consider the issue seriously.
None of this justifies Mr Trump's economically counterproductive, highly destabilising policies. But rather than become overwhelmed or distracted and end up striking unfavourable trade deals, countries must take their time, think strategically, and, where possible, bring mutually beneficial offers to the table. ©2025 Project Syndicate