Power is a dynamic in negotiations, shaping how parties interact, make decisions, and achieve outcomes. Its presence influences everything from negotiators’ strategies to the ultimate agreement terms.
Latest geopolitical trade negotiations have seen power or perceived power as a massive factor in how our business trading environments are being affected which will no doubt have economic consequences .
There are numerous types of Power.
Information and Expertise: Access to knowledge, data, or technical skills can strengthen a negotiator’s position.
Position: Status or authority can increase Power, allowing one party to influence outcomes based on their position.
Referent Power: Reputation and trust can allow for influencing decisions, even in the absence of formal authority
Reward and Coercive Power: The ability to grant benefits or impose costs can prompt compliance or resistance.
If we review the Trump administration and China’s negotiation strategies, we can see psychological strategies stemming from power. Below is a breakdown of key elements shaping the approach.
1. Power Dynamics and Leverage
- BATNA-Centric Strategy: Trump prioritises strengthening his Best Alternative to a Negotiated Agreement (BATNA) by imposing tariffs and publicly stating China depends on US markets, placing China in a place of immediate defeat.
- Structured Choice: By presenting extreme demands (e.g., “tariffs will come down only if China opens markets”), Trump’s strategy ,making bold statements stems from the Door in the Face (DITF) technique (Cialdini, Vincent, Lewis, Catalan, Wheeler, & Darby, 1975). This is a standard enough strategy of going in higher so that the other party will end up agreeing to terms, which may have been the required outcome. The concern is that the strategy has a real taste of The Art of The Deal. Trump (1987) where he advises readers to think big, maximise options, use leverage, fight back, and have fun (Economy, 2016).
2. Emotional Tactics and Performative Negotiation
- Strategic resentment: Trump’s public outbursts and threats leverage the interpersonal effects of resentment of where world trade has been operating before his return to office, signaling resolve and pressuring China to yield to avoid conflict. However, this risks provoking defensive reactions if perceived as inappropriate.
- Performance and Bravado: Emotional anchoring shapes media narratives and market reactions even when disconnected from reality. This aligns with his role as a “performer” who uses publicity to amplify leverage.
3. Cognitive Biases Exploited
- Win / Loose Perception: Trump works to a (“win-lose”), reinforcing positional bargaining.
- Position of Control: By acting as if the US is always in charge and the most powerful, Trump shows overconfidence. This attitude can cause him to misunderstand how other countries think and what they can do in trade negotiations.
5. Cultural and Emotional Misalignment
- Cross-cultural negotiation styles: Trump’s direct and confrontational negotiation style lacks understanding of how China prefers to negotiate. Chinese negotiators value indirect communication, subtlety, and maintaining harmony in relationships. They avoid public disagreements or blunt criticism, as these can cause embarrassment and lead to a loss of “face,” a key cultural concept that means preserving dignity and respect.
Having traded internationally for many years, power remains a massive obstacle in negotiating agreements. By balancing self-awareness with underlying interests, preparing for cultural differences, and fostering collaboration, parties can achieve durable, win-win outcomes. Start with finding the common ground to create trust and build relationships supporting strategic trade opportunities. Success lies in respecting differences while leveraging shared goals.
I highly recommend two reading materials with varied perspectives regarding negotiation .
Margaret Dineen