Zero-Sum Tactics That Built Trump Inc. Could Backfire With World Leaders
AILSA CHANG, HOST:
For decades, Donald Trump has claimed to be a master negotiator. As president, he's had ample opportunity to demonstrate those skills on the world stage. He's met with North Korean leader Kim Jong Un to negotiate North Korea's nuclear weapons program. He's going toe-to-toe now with China, the European Union and Canada in what could become a full-on trade war. And soon, he will meet one-on-one with Russian President Vladimir Putin. So what is the guiding principle behind Trump's negotiation style? Is there one at all? One law professor thinks there is. David Honig teaches negotiations at Indiana University, and he joins us now. Welcome.
DAVID HONIG: Good afternoon.
CHANG: So you divide the world of negotiation into two kinds of bargaining styles. And you say Trump only uses one kind. You call it distributive bargaining. What is that?
HONIG: Distributive bargaining is what some people will call win-lose bargaining, when the parties don't have any mutual interests at all. So what they're looking for is what we call in negotiations value taking. There's only one amount of pie. And once I get some, and the other side gets some, whoever gets the most wins.
CHANG: OK. And do you think distributive bargaining - that style - do you think that's a style that served Trump well in, say, the real-estate world?
HONIG: It's an interesting question. I reread "The Art Of The Deal" today in anticipation of this discussion. And when you look even at his own book, in the pure real-estate environment, it did serve him well. But when the deals that he was seeking went beyond simple real estate purchase and sales, ownership of a professional football team or his casinos, where the deals were more complex and had a lot more involved than just buying and selling something of value, they did not ultimately work out well for him. Sometimes, you have to deal with people again. And if you've taken them, or they feel like they've been taken, they're not going to deal with you again. You can do that with a cabinet maker who put the cabinets in your hotel or casino because you can find another cabinet maker. But you can't find another Canada. You can't find another China.
CHANG: So let's talk about that. Let's talk about the international trade arena. What are the limits specifically that distributive bargaining bumps up against?
HONIG: It bumps up against a few limits. The first has to do with ongoing relationships, which I just mentioned. The second and, I think, more important has to do with complexity and what we call value adding. So when you're value taking, there's a limited pie. You want as much as you can. When you're value adding, you're looking at how you can create value for the other side. The other side can create value for you. And, therefore, ultimately, you walk away with a deal that you both want.
CHANG: Yeah. You call this integrative bargaining. This is the other bargaining style.
HONIG: That is correct. And you also just have to deal with complexity. It's almost whack-a-mole when you're dealing with international trade. When we imposed tariffs on China, and China responded by terminating all of the soybean orders with the U.S., not only do the farmers suffer here in the United States. China buys their soybeans from Russia. From an international point of view, it gets even more complex because what we've done is we've just created a new opportunity for Russia to get hard currency, which limits our ability to impose sanctions on Russia. And so it has an effect that goes far beyond simply the price of soybeans.
CHANG: David Honig is an attorney and adjunct professor at Indiana University, where he teaches negotiations. Thank you very much for being with us today.
HONIG: My pleasure.
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