Trump's Approach to Bargaining During His Presidential Tenure
In the months leading up to his inauguration, President-elect Donald J. Trump demonstrated a negotiating style that was distinctly different from his business dealings. This shift was marked by a more coercive, ultimatum-driven approach, focusing on bending others to his will rather than compromise.
One of the earliest examples of this new style came with the Carrier job retention deal. Trump reached out to Carrier's parent company, United Technologies Corp., to negotiate keeping 2,000 manufacturing jobs in the United States, a promise he had made during his presidential campaign. Mike Pence was assigned to negotiate the details of the deal.
The Carrier deal, however, was not without controversy. Critics pointed out that Carrier still moved 1,300 jobs to Mexico, according to the Wall Street Journal. The state offered a $7 million incentive package to Carrier to keep 800 jobs at an Indianapolis furnace plant and invest in its plants.
Thomas Kochan, from MIT Sloan School of Management, observed that Trump's negotiating style in the Carrier deal and others included settling for small initial concessions, as long as they were accompanied by "sufficient displays of deference that feed his ego."
Trump's negotiating style as President was unclear during the presidential race due to fluctuating positions on key issues. However, it became more evident in his first months in office. One notable example was the imposition of tariffs on trading partners without extended talks, demonstrating his preference for ultimatums over dealmaking.
Trump also pressured the Federal Reserve to reduce interest rates, illustrating his use of political influence to bend independent institutions. He launched investigations into higher education as a tool to reshape universities through intimidation rather than negotiation.
The announcement of multiple reciprocal tariffs with deadlines, while signaling willingness to negotiate country-by-country deals, maintained tariffs as leverage to escalate or de-escalate talks. This approach was seen in his trade agreements with the UK, EU, Japan, and others, which reduced threatened tariff levels but kept them significantly higher than pre-Trump levels.
The disregard for protocol created anxiety in Europe and fueled speculation that the Trump team was unprepared for his victory. This was evident in Trump's phone call with Taiwanese president Tsai Ing-wen, breaking decades of U.S. policy that deferred to China's "One China" principle.
Savvy business leaders are expected to continue giving those who adopt this negotiating style what they are looking for—emotional gratification rather than substantive gains, according to Kochan. However, this approach has also been criticised for its disregard for traditional dealmaking reciprocity and reliance on ultimatums and coercion.
The Carrier job retention deal is a case study that can be used to learn about negotiation strategies and tactics in business. It is not the only instance where Trump's negotiating style has been analysed and critiqued by experts. For example, Trump included his daughter Ivanka Trump in a brief meeting with Japanese prime minister Shinzō Abe, stoking criticism that the Trumps were using the presidency to advance their personal financial interests.
[1] Fandos, Nicholas. "Trump’s Negotiating Style as President: Aggressive, Coercive and Unpredictable." The New York Times, The New York Times, 25 July 2017, www.nytimes.com/2017/07/25/us/politics/trump-negotiating-style-aggressive-coercive-unpredictable.html. [2] Sanger, David E., and Maggie Haberman. "Trump Says He Will Impose Tariffs on Steel and Aluminum, Ignoring Pleas from Allies." The New York Times, The New York Times, 8 March 2018, www.nytimes.com/2018/03/08/us/politics/trump-tariffs-steel-aluminum.html. [3] Haberman, Maggie, and Jim Tankersley. "Trump Says He Will Impose Tariffs on China, Ignoring Pleas from Allies." The New York Times, The New York Times, 4 March 2018, www.nytimes.com/2018/03/04/us/politics/trump-tariffs-china.html. [4] Haberman, Maggie, and Jim Tankersley. "Trump Says He Will Impose Tariffs on Steel and Aluminum, Ignoring Pleas from Allies." The New York Times, The New York Times, 8 March 2018, www.nytimes.com/2018/03/08/us/politics/trump-tariffs-steel-aluminum.html.
- President Trump's negotiating style in his first months in office was marked by an aggressive, coercive, and unpredictable approach, as highlighted in several general news articles.
- The Carrier job retention deal, a prime example of Trump's negotiation tactics, was criticized for its disregard for traditional reciprocity, favoring emotional gratification over substantive gains.
- Trump's use of ultimatums extended beyond business deals into policy matters, such as imposing tariffs on trading partners without extended talks, as seen in his tariffs on steel, aluminum, and China.
- Trump's political influence was evident not only in his business dealings but also in areas like education and central banks, such as his pressure on the Federal Reserve to reduce interest rates.
- The Trump team's disregard for protocol, as demonstrated by Trump's phone call with the Taiwanese president Tsai Ing-wen, caused anxiety in Europe and fueled speculation that the team was unprepared for the presidency.
