Reputation Matters – the Real World Edition

As you are likely aware, the US and China are embroiled in a trade war levying tariffs on an assortment of goods that travel between the two countries.  Today Bloomberg reports that one of the major barriers to resolving this agreement is President’s Trump’s reputation.

After a weekend of confusing signals, Trump’s credibility has become a key obstacle for China to reach a lasting deal with the U.S., according to Chinese officials familiar with the talks who asked not to be identified. Only a few negotiators in Beijing see a deal as actually possible ahead of the 2020 U.S. election, they said, in part because it’s dangerous for any official to advise President Xi Jinping to sign a deal that Trump may eventually break.

This should surprise no one who studies the negotiation process.  A well-worn negotiation refrain is that it takes two to tango.  That is each side has to trust that the other will follow through on the terms of the agreement for an agreement to happen.  Otherwise one will be, as the 1980’s philosopher Billy Idol said, dancing with myself.  That’s a difficult way to end a trade war.

Readers in this space know well that this is the reputation that the Negotiator in Chief has spent years cultivating.  As Politico states:

The president’s meandering statements and conflicting remarks left aides and allies alike guessing at his intended course of action. . . . “Sorry, it’s the way I negotiate,” Trump shot back at a reporter during Monday’s press conference when questioned about whether there’s an actual strategy behind his constant back-and-forth on his positions regarding trade with China.  “It has done very well for me over the years,” Trump said. “It’s doing even better for the country.”

Whether it’s better for the country is an open question as we wait for a major negotiation success (any success?) with this strategy.

Hat tip – Teagan Goddard

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