Bipartisan Dealmaking: Are Trump’s Negotiation Skills Up to the Challenge?

By Marty Latz*

 

 

Are President Trump’s negotiation skills effective enough to achieve significant bipartisan deals with the incoming House Democratic majority?

He certainly thinks so, saying at his post-election press conference that“it’s all about deal making” with the new Democratic majority.

Likely House Speaker Nancy Pelosi (D-CA) also said post-election that negotiation will be crucial to getting much passed over the next two years.

 So does President Trump have great negotiation skills, and will they get much accomplished?

I have serious doubts about his skills. But they may very well get some things done in spite of them. Why?

One, President Trump for almost 50 years in business and in his first two years as President has used virtually identical negotiation strategies in all his deals. Somewhat of a one-trick pony, his strategies included bluffing, threats, bullying, excessive hyperbole, outrageous moves, cherry-picked standards, and highly aggressive agenda control tactics like super short false deadlines.

Crucially, these strategies are largely inconsistent with the experts’ proven negotiation research on what works in contexts involving a future relationship between the parties - which applies to presidential negotiations with Congress.

Trump also garnered a reputation in business as someone who uses unethical negotiation strategies, like making intentional misrepresentations of material facts, slipping in changes after doing his deals, and walking away from firm commitments despite legally enforceable agreements.

These strategies proved toxic in many of his negotiations with partners, subcontractors, employees, and other counterparts. In fact, many of these led to his over 4,000 litigation disputes since he started in business.

Examples abound, from his failed Harrah’s casino partnership in the early 1980s to his public threats and name-calling against New York City Mayor Ed Koch in 1987. His strategies vis-à-vis Mayor Koch prevented him from getting an incredibly lucrative deal to build the world’s tallest building in a massive development he called “Television City” (NBC was to be its anchor tenant).

Many of these same strategies also led to his failed negotiation shortly after his inauguration with former Mexican President Enrique Peña Nieto to build and fund a wall, leading Nieto to cancel their first planned meeting. 

Two, Trump did his homework in the early 1980s and negotiated some great deals. The Commodore Hotel redevelopment next to Grand Central Station (now the Grand Hyatt) and Trump Tower were excellent deals.

But he let his celebrity go to his head in the mid-1980s and stopped doing his negotiation due diligence. He then overpaid by tens of millions for the Eastern Air Shuttle and the Plaza Hotel, among other bad deals.

He exhibited this same lack of knowledge in his initial negotiations with House Republicans looking to repeal and replace Obamacare. As he then stated, “Nobody knew that healthcare could be so complicated.”

His lack of preparation made it impossible to do the nitty gritty negotiating necessary to pass the bill. Harvard’s Negotiation Briefings noted that “House members left [a meeting on the day of the vote between Trump and the House Freedom Caucus] with the impression that Trump hadn’t learned enough about health-care policy to know how to put together a package that could win in the House, let alone the Senate.”

Three, neither businessman Trump nor President Trump has demonstrated an interest in changing his negotiation style. President Trump has failed to pivot despite the presidential environment presenting radically dissimilar negotiation challenges.

For instance, while he did slightly modify his strategies to get the House to repeal Obamacare on his second try, he repeated the same mistakes in the Senate as he initially made in the House. He lost that negotiation by one vote. The thumbs-down was cast, not surprisingly, by the late Sen. John McCain, whom Trump had ridiculed as a “loser.”

Trump had also questioned McCain’s status as a genuine war hero despite McCain having been imprisoned and tortured for five years during the Vietnam War. Trump said “he was a war hero because he was captured. I like people who weren’t captured.”

 Did Trump’s name-calling and demeaning comments impact McCain as he considered joining his two Republican colleagues in killing Trump’s signature domestic effort? He would deny it. But if you’re on the fence on an issue, and one choice involves going against someone who called you a “loser,” personally attacked you on a core patriotism issue, and whom you don’t respect, would it impact your decision? Intangibles like this make a difference in negotiations, if only subconsciously.

Finally, despite all this, I still expect Trump and the House Democrats to negotiate some deals, potentially even significant ones. Why? Because a) a big sweet spot may exist in some of these negotiations and finding it may not be much of a negotiation challenge, b) effectively negotiating a favorable deal is a separate question than getting any deal, especially if you have few strong policy constraints, and c) Trump for almost 50 years has viewed all negotiations as win-lose - and a failed negotiation to him would reflect a loss.

To Trump, a loss is akin to being a loser. He would try to avoid this at all costs.

* Marty Latz has been studying and teaching negotiation for 25 years and analyzed over 100 Trump deals for his new book The Real Trump Deal: An Eye-Opening Look at How He Really Negotiates.