As the global trade war intensifies, "The Art of the Deal" and "The Art of War" are once again drawing attention. These two books are often cited as useful references for understanding the strategies of former U.S. President Donald Trump and China. Here, we'll examine the impact of these negotiation dynamics on the global market and highlight key takeaways.
1. Trump and 'The Art of the Deal'
- Core Principle: In his book, Trump emphasizes, "Negotiate as strongly as possible to make the deal favorable." Threats, pressure, and exaggerated statements are often cited as his common negotiation tactics.
- Application Case: In the early stages of the U.S.-China trade war, the strategy of imposing high tariffs to pressure China is similar to this principle. The essence is to "shake the opponent and force them to accept your conditions."
2. China and 'The Art of War'
- Key Lessons: Sun Tzu’s "The Art of War" contains the message of exploiting the opponent's weaknesses and inducing them to act emotionally. The following passages are particularly noteworthy:
- "When the enemy is in a hurry, delay them."
- "When the enemy flaunts their strength, strike their weakness."
- China's Response: Retaliatory tariffs, suspension of U.S. agricultural purchases, and geopolitical maneuvering (e.g., potential restrictions on rare earth exports) are considered actions applying the core principles of "The Art of War."
3. Impact on the Global Market
(1) Risk Factors
- Increased Uncertainty: Chicken game-style strategies such as tariff wars disrupt the global supply chains of companies. This resulting uncertainty increases market volatility.
- Increased Risk in Emerging Markets: A slowdown in China’s exports can directly hit emerging market economies, especially since many emerging Asian countries are highly dependent on manufacturing.
(2) Opportunity Factors
- Seeking Alternative Trading Partners: Both the U.S. and China are diversifying their trade deals by activating "Plan Bs." This provides new opportunities for regional economies such as those in Southeast Asia and India.
- Potential for New Technology Investment: Competition between the two countries accelerates the development of advanced technologies such as artificial intelligence (AI) and 5G, creating investment opportunities.
4. Insights for Problem Solving
(1) Finding Balance in Negotiations
- Pressuring the other party alone does not lead to a sustainable solution. Disputes are sometimes short-term victories, and a balanced approach is needed to end the stalemate in the long term.
(2) Ensuring Policy Flexibility
- Precise and flexible policies are essential to minimize market shocks. In particular, it is necessary to strengthen relationships with neighboring countries and discover new markets during trade disputes.
(3) Sustainable Cooperation
- It is more important to establish a sustainable cooperation structure than to focus on short-term economic gains and losses. This can lead to increased stability in the global economy.
5. Additional Resources for Understanding the Market
- Recommended Books:
- The Art of War: Essential for understanding the strategic thinking of adversaries.
- The Art of the Deal: Explore how to analyze Trump's way of thinking and apply it in practice.
- Related Podcasts:
- Bloomberg's What Goes Up: Provides weekly insights into global market uncertainties and investment opportunities.
- Ep. “The Craziest Thing I Ever Saw in Markets (This Week)” explores the latest unusual phenomena in financial markets and the reasons behind them.
6. Conclusion
The U.S.-China trade conflict is an issue that should be approached from multiple perspectives, not just economically, but also politically, technologically, and with an understanding of psychological warfare. Companies and investors must understand both sides' negotiation styles, explore new market opportunities, and actively employ strategies to manage volatility. Above all, maintaining a long-term perspective and focusing on cooperation rather than competition will be key to ensuring the sustainability of the global economy.
*Source URL:
https://www.bloomberg.com/news/articles/2019-05-17/-the-art-of-the-deal-meets-the-art-of-war
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