Leveraging the Art of the Deal & What Comes Next – Top 3 Takeaways – April 10th, 2025 - Driven By Braman Motorcars
Takeaway #1: The Art of the Deal
Maybe you’ve read the Art of the Deal, maybe you haven’t. Maybe by now Xi Jing Ping has read the Art of the Deal, maybe he’s had someone translate it for him. At a minimum we know that Dennis Rodman delivered the Art of the Deal to North Korea’s Little Rocket Man eight years ago. Something that continues to confound me is the extent to which world leaders are so dense. Questions for you... 1) If you punch Donald Trump what will Donald Trump do? 2) If you retaliate against Donald Trump, what will Donald Trump do? Now, 3) If you come to the table seeking a deal with him, what will he do? You don’t need to be a world leader, or at this point even a person who has read the Art of the Deal to know that the answers to these questions are 1) Hit you harder 2) Retaliate harder 3) Negotiate. Now, to the lug heads in leadership of countries, and various institutions, I’m not sure how it is that after four years of governing previously and in the 79th year of his life, they or anyone is taken by surprise. Remember the Oval Office meeting with Zelenskyy that turned south? What was it that President Trump ending up saying to Zelenskyy when he became indignant? “You don’t have the cards”. Now, if Trump were some tin pot dictator from a third world country, or something somewhat similarly weak like say the Prime Minister of Canada, for example...things would be different because in that instance they would have the cards...but they don’t. A) The US economy is the top economy in the world. Inherently no other country has the cards that we have (in fact the US economy is almost double that of the entire Eurozone). B) Even if other countries had similarly sized economies, they would still come out net losers going toe to toe with us on tariffs because they’re the countries that benefit most from trade. There are 195 countries in the world. How many do you think we run trade surpluses with? The answer is 5. Australia, Hong Kong, Central and South America and the Netherlands. That means that in an eye for eye situation, the US would come out the biggest loser only 5 times compared to 190 times other countries would come out the biggest losers.
Takeaway #2: It’s time for negotiation
There are many great anticdotes in the Art of the Deal. One of the best is Trump's exchange with Jimmy Carter. As Trump noted, after being voted out of office in 1980, Carter came to visit Trump to ask for a donation for the building of his presidential library. Trump asked him how much he was looking for. Carter asked for $5 million – which is about $18 million in today’s money. Trump wrote: I was dumbfounded. I didn't even answer him. But he said that he learned something from that exchange, and it was this... Until then, I'd never understood how Jimmy Carter became president. The answer is that, as poorly qualified as he was for the job, Jimmy Carter had the nerve, the guts, the balls, to ask for something extraordinary. And that’s part of this as well. But so is the perhaps the most important aspect of negotiation according to Trump. The best thing you can do is deal from strength. And leverage is the biggest strength you can have. Now Trump has literally been talking about the United States being taken advantage of on trade deals for over 40 years. In his first administration he began the implementation of tariffs against China and brokered the USMCA trade deal. The second time around he was ready to broker a good deal. There is nothing here that is a surprise. He even explicitly spelled this out for the rest of the world on February 13th in this announced “Fair and Reciprocal Plan”, that I covered at the time which said this: The “Fair and Reciprocal Plan” will seek to correct longstanding imbalances in international trade and ensure fairness across the board. AMERICA WILL NO LONGER TOLERATE UNFAIR TRADE PRACTICES: The United States is one of the most open economies in the world, yet our trading partners keep their markets closed to our exports. This lack of reciprocity is unfair and contributes to our large and persistent annual trade deficit. Now, when this was announced, when this was published, did any countries come to the table to broker a better deal? Nope. So, what did they think would happen? That this would be the time Trump wouldn’t do what he said he would do? So last Wednesday came Trump’s “Liberation Day” announcement of the reciprocal tariffs that were put in place yesterday. Now, back to what Trump said about “leverage” being the biggest strength you can have. We’re now into the leverage phase. Whatever is felt here is felt worse in at least 190 countries elsewhere. We’re far better positioned for a trade war if that’s what they want. They didn’t want to do it the easy way so now they’re going to be brought into fair trade the hard way.
Takeaway #3: The endgame
Just after the stock market opened lower on Wednesday Trump Truthed this: BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before! THIS IS A GREAT TIME TO BUY!!! DJT. That’s a strong sign that he believes this will be resolved sooner than later and didn’t that prove to be prophetic as Trump announced a 90-day pause on most tariffs with rates, aside from China, dropping to 10% (China’s rate was raised to 125% - in the same message) giving way to one of the greatest stock market rallies of all-time. Every day that goes on, we have greater leverage. And boy it didn’t take long – only about 13 hours of US tariffs – before many countries that still need to read the Art of the Deal final came to the table in a meaningful way to negotiate. Now China. That’s a different story. Which in the interest of our national security, as a top priority, isn’t necessarily a bad thing.