Donald Trump's Failed Art Of Persuasion

[This column has nothing to do with video game mushrooms]
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The era of Trumpian protectionism has officially begun. On Monday, the president announced a quintupling of the total value of Chinese imports to be taxed, from $50 billion in goods to $250 billion, effective September 24th. And now that the Chinese have struck back with additional trade barriers, it’s likely that President Trump will respond with another round of duties that will result in a 10% to 25% tax on every dollar of the roughly half a trillion in goods Americans import from China each year.

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There is little reason to expect that these new duties are going anywhere, in part because the demands the Administration has given its Chinese counterparts are impossible to meet in the short run. The White House is reportedly holding out for a promise from China to unilaterally reduce the bilateral trade deficit by $200 billion over the next three years. But as a recent analysis by Reuters shows, the U.S. simply doesn’t produce enough stuff the Chinese need for this gap to be closed purely through China growing its purchases of U.S. goods. For instance, American farmers in total exported just $137 billion in crops last year. Meanwhile, the U.S. government is increasing restrictions on the ability of U.S. companies to sell in-demand technology to Chinese companies and individuals.

It’s not surprising that the president so misunderstands the dynamics of international trade that he is mistaking the bilateral trade balance as a measuring stick for economic competition—this ignorance has been on display for as long as Donald Trump has been a public, political figure. What bears contemplating, however, is what a supremely bad negotiator Trump has been on the international stage, given his putative skills and experience in this area. While the president may be right that his policies and those put in place in retaliation are hurting China’s economy much more than America’s, there is increasing evidence that the tariffs, and Trump’s negotiating style, are not the right tools for getting trade partners to change their behavior.

There is a well-established phenomenon in experimental psychology called reactance, or the tendency for people to strongly resist being told what to do. Reactance is well illustrated by one of the most famous studies in all of psychology, the Milgram Experiment on obedience to authority figures, in which volunteers were tricked into believing they were taking part in another experiment and were asked to administer electric shocks to a “learner.” Told that they were aiding in an experiment measuring the effect of punishment on people’s ability to recall information, these volunteers were asked to administer electric shocks to the learner in what they thought to be increasingly large dosages—large enough eventually to be fatal.

As one version of the experiment showed that 65% of participants were willing to administer a fatal dose of electricity, it is usually presented as evidence of human beings general willingness to engage in evil acts at the behest of an authority figure. But equally revealing was that in another version of the experiment, in which participants were commanded to deliver the shock, rather than appealed to with arguments that the act was necessary for the benefit of science, each and every participant refused to do so. In other words, human beings are very persuadable, but they become intransigent when they feel that their freedom to choose is being circumscribed.

If we apply this concept of reactance to international trade negotiations, it becomes obvious why Trump has been unable to win any significant concessions from major trading partners, despite the massive leverage the United States has as the largest, uniform consumer market in the world. It also helps explain why leaders of the European Union, China, and other partners feel the need to retaliate against tariffs with tariffs of their own, even when they likely realize, at least better than President Trump, that the retaliation will be as harmful to their economies as the initial tariffs themselves.

As the social psychologist Jonathan Haidt has written, on the societal scale, reactance presents itself as “an urge to band together to resist or overthrow bullies and tyrants,” and can make “people do the opposite of what they were pressured to do, even if they were not inclined to act that way beforehand.” Seen in this light, it’s possible that Trump’s grandstanding on trade may even redound to the benefit of the Chinese Communist Party, which now has an outsider to blame for a forthcoming slowdown of the Chinese economy, even if it is not actually related to the ongoing trade war.

Christopher Matthews is a writer who splits his time between New York City and Accra, Ghana, with an interest in the intersection of markets, the economy, and public policy. He previously held staff positions at Axios, Fortune Magazine, and Time Magazine, and has been published in Forbes and Debtwire.

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