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- [00:00]
Ryan Deiss
I think, you know, oftentimes in life and in business, you're put in a. In a position where you're kind of damned if you do and damned if you don't. And there's. You're kind of choosing between a lot of bad options. I actually think they've run the calculus and what they are, what they're betting on. And I'm with you, by the way. Like, there's some stuff that I bought that I just. It's going to be more expensive, and I don't love that. But this is the calculation that I, that I think that we're doing. And it should be said, by the way, this is not a politics show. Roland, we're not overly political people. I mean, I think we generally have our leanings, but both of us are kind of like just, you're all crackheads. Just tell us the situation we're operating under and we'll. We'll figure it out. I don't trust any of you knuckleheads.
- [00:46]
Roland Frazier
Hey, everybody. Welcome to another episode of Business Lunch with your hosts, Ryan Deiss and myself, Roland Frazier. We are today kind of following up on something we talked a little bit about before, but in a different context. We talked about the fact that the United States, as of just a couple days ago, as we record this, has put into place tariffs, and there are more to come that are being framed as negative and a trade war. And my dog, then the hunt is that I've got things overseas that I buy regularly. I've got things that are being repaired overseas that are going to come back that I'm going to be paying tariffs on now that I wouldn't have paid on before. I would prefer not to. And so I think, like, Ryan and I were talking back and forth, as we often do, and saying this is probably less about tariffs and more about negotiation and leverage. And so we wanted to do a little show on that and talk about that a little bit. So, Ryan, I'll, I'll kind of put it to you. What do you think? Like, do you think that the tariffs are being put in place as a new way to generate revenue or, or let's say, or to exclusively generate revenue, and that the idea is we're just going to put these in place and they're going to stay there, or is there some other thing at work, like, in the negotiation context? I would say, what do you think the end goal, the desired outcome of this whole thing is?
- [02:20]
Ryan Deiss
Yeah, I mean, I think, you know, oftentimes in life and in business, you're put in a, in a position where you're kind of damned if you do and damned if you don't. And there's. You're kind of choosing between a lot of bad options. I actually think they've run the calculus and what they are, what they're betting on. And I'm with you, by the way. Like, there's some stuff that I bought that I just. It's going to be more expensive and I don't love that. Yeah. But this is the calculation that I, that I think that we're doing. And it should be said, by the way, this is not a politics show, Roland. We're not overly political people. I mean, I think we generally have our leanings, but both of us are kind of like just, you're all crackheads. Just tell us the situation we're operating under and we'll, we'll figure it out. I don't trust any of you knuckleheads. Right. You know, so, so I just kind of just setting that aside, we don't have an agenda, you know, on this. You know, we're not backing any, any parties or candidates or anything.
- [03:12]
Roland Frazier
But there are some learnings, I think, right?
- [03:14]
Ryan Deiss
Oh, heck, yeah. And so that's. I want to think about this from a business perspective because what they've done, and I think any time you can do this in a negotiation, I sort of think that in the medium to long term that America wins no matter what. So I think they figured out that if the tariffs go into place, that it is going to generate some additional revenue. Now it's going to generate some additional revenue at the expense of the consumer. But I think what they're betting is that whatever the additional expenses incurred by the consumer, that that's likely going to be hedged against, against inflation coming down. So the consumers have already been paying more and have been used to paying more. And so if as a part of this, frankly, sales go down a little bit, you get, you know, you get the economy shrink a little bit, then you have deflation, Then what we have is prices going down. At the same time that the cost of these things, because the additional taxes go up. I think they're betting that it's going to wind up evening out. But yeah, I, they're telling a whole story about all this new revenue that it's going to generate. I don't think that they believe that it's going to generate a ton of revenue because I think that they believe that, that these businesses that. I think they believe two things. I think they believe that, number one, countries are going to match the tariffs. They're going to either come bring their tariffs down or they're going to go, which some already have. And also that a lot of these businesses are simply going to move their operations to the States, which is going to be good for, for consumers. There's another piece of this, though, that nobody's really talking about, and that's that the US government has to refinance like 3, 5, like trillions of dollars in debt that it has to. That it has to refinance and it has to refinance it at essentially the Fed rate. Right. That's, that's kind of what it's refinancing it. And not exactly that I'm speaking kind of broadly, but as these, you know, as the economy is dipping, it's bringing interest rates down, which means that when we have to go back and refinance all that debt, we're refinancing it at a lower rate. So if all they do, I think they win three ways. They win either because it generates some additional revenue. They win because countries bring their tariffs down because of a negotiating strategy and. Or companies who are producing overseas produce here, which is good for the American worker. And then thirdly, they win because this is bringing interest rates down, which means they get to refinance their debt, which is happening in a few months. So likely what they're going to be able to do is kind of tank the stock market for a bit, which just don't sell, and you're going to be fine. Like, if you have stocks just don't sell, you're fine. I was like, oh, wiped out like 3 trillion or 8 trillion dollars. I forget what the number. It's like, if it got wiped out that quickly, was it ever really there? Come on.
- [06:12]
Roland Frazier
Right?
- [06:12]
Ryan Deiss
Just don't sell. You're going to be fine. They're going to do it for a little bit. They refinance the debt, then they can turn all of this stuff off. Everything's gonna, you know, go right back up and it'll be. So I think they basically have run that calculation and realized that we kind of can't lose. And I think they're probably right. And everybody's freaking out because everybody thinks short term. And I think in business, in life, if you can think longer term, you're probably gonna win. So that's my take. What do you, I mean, from a negotiating. You're a far better negotiator than I are. What are you seeing?
- [06:45]
Roland Frazier
Well, the first thing I like is And I think these are things that we can all use. And the first thing is that how do you bring difficult, entrenched position people to the negotiating table to start with? And I think that like this threat, which he then followed through because he announced it to get, I believe, to get them, the other people to the table, he looked at basically a situation and said, there are several countries that charge significantly higher tariffs than the United States. Most of those countries have a significant trade deficit because they sell much more to the United States. The United States sells there, yet they place tariffs on the United States goods that are coming there. And that just doesn't fundamentally seem fair. And the position of the countries, like let's say China are basically, you can't make it for as cheap as we can. So we don't really have any reason to, to change our tariffs. We're selling in there. And you can't afford your economy, can't afford the hit of radical price increases, of you reciprocating the tariffs that we've got. And it takes significant resolve to say, you know what, if you can't sell your stuff here anymore, then that's going to be bad for your economy too. So it's not the one way street that you thought it was. And so I'm going to throw up a giant threat to your economy and the trading partner that we are now. That means that you need to have leverage. So if you have no ability to get leverage in the transaction, then that would be difficult. But let's say that you are buying a new car or anything at the store, you know, you're shopping. Let's say that you are a business person and you have suppliers who sell to you who maybe don't give you favorable terms. You know, they don't give you credit or they don't give you good credit or they, they've told you about their price increase, I guess just got a notice of a wine locker rental that's going up 20%, you know, and I'm like, no, that's not acceptable to me. So you have to have some leverage in that There is an existing relationship to take advantage of what we're talking about here. But you do in so many situations of your life. So that's the first thing is identify that you do have some sort of commercial transaction history or desired interaction that's going to take place because that's where you get your leverage now. You get your leverage by saying something outrageous here, which is kind of Trump style. The outrageous thing is I'm going to I'm going to put in tariffs that have not been put in place in, I think it's 54 years or something like that. You know what you know, well, you're going to have to get that through Congress. Oh, no, I'm not. I unilaterally can make this decision. You know, maybe you can, maybe you can't, but I'm going to do it. And it's going to happen until somebody says it can't. So pain for you, what do you think about that? Now they're going to be replying, well, but pain for you, too. And then you're at the negotiating table. You've taken somebody that said, we will not negotiate on tariffs or we will not negotiate on price. We won't lower our price. We won't give you credit terms. You're going to have to pay what we say because you want this thing that we have. And you say, yeah, but what if I don't? Right. And now you've got them to the table so you can actually have a conversation. So that, to me is the first big takeaway, is throw up the thing that they're afraid of that will be bad for them to get them to the table in the first place. I think that's the very first thing that we do.
- [10:46]
Ryan Deiss
I think this is important, though, and tell me if you disagree. I think you have to be able to back it up, though. You have to say, I'm willing to say this, but I'm also willing to do it. I think a lot of people try to bluff their way through negotiating, and this is not poker.
- [11:01]
Roland Frazier
Right.
- [11:01]
Ryan Deiss
I mean, I know when we've done business sales and business transactions and it's, what are we willing to do? Like, are we willing to walk? And if we're willing to walk, then we'll say we're willing to walk. And if we're not, then we're not going to say that we are. And I think all too often people get themselves in trouble in negotiation and they lose credibility because what they're saying, the big grenade that they're prepared to drop at everybody's feet, they're not actually. Either they don't have the grenade or they're. They're not prepared to drop it. And I do think that's important. You've got to have some courage.
- [11:34]
Roland Frazier
Yeah. And I remember, you know, and I remember our covenant not to compete in the deal that we did where I told the guy, you probably shouldn't do this deal if that's something that you're worried about. Right, yeah, we did not want to walk away, but we're willing to. Right. Multiple times. There's the power that you have in being able to say we're going to walk away from the table is huge. And here's the thing, it's not permanent. You can return to the table. You just have to be willing to walk away for a minute. So what you're saying is absolutely true. He had to be willing to throw up the tariffs and clearly he had to follow through with that. But now I think it's something like 37 countries are petitioning the White House for trade negotiations that did not exist a few days ago. Right, right. So you, you. But, but now the White House can return to the table and in returning to the table you can start to do the second thing, which is how do I frame my concessions as mutual benefits? Right. So how do I, how do I come back and say, you know, well, I'm willing to come back to the table if we can talk about, you know, what we might do about this. And anything that we do about this will benefit both of us. Because before it was a one way street, it was take it or leave it. You know, you need us, we don't need you. Now you've got them to the table. And then the next thing is to create a frame, the frame around the discussion has to be, hey, this isn't a trade war. This is fair trade. Right. We're not, we're not here to start a trade war. I don't want to start a trade war. It's just that it wasn't fair. All I'm trying to get is fair. It's very hard for people to negotiate against fair. It's why I love proposing deals that are like 50, 50, you know, and so that I believe is the second thing is that, that when you're having that conversation, once you've got that person to the table, you've, you know, that government, that, that, that whoever to the table. You've got to frame the negotiation as a collaboration, which is one of our big negotiating themes. You've got to stay within the zone of fairness, which is, you know, there is a range of, of outcomes that will be fair to both parties and we're going to play within that range. We may try to be closer to what's most fair to us and you might be know there. And that's where the true art of negotiation comes into play. But we are now collaborating. Any concession that either of us makes has to be a mutual benefit. It doesn't have to be quid pro quo, though. It doesn't have to be an equal give. No, it's just, you know, we. It could be we're giving up our 37% tariff and you give up your 12% tariff and let's just have zero because that's fair. That's a hard place to come back from, right? I mean, it's hard to fight against. No, we want it to be unfair. Well, that doesn't sound right. I feel bad about that. I think I'm going to walk away from the table again. No, no, no, no, no. You know that I think that's really a very interesting thing is, like, now you got them there, you've got to frame it. And I'd love to hear your thoughts on that before we go to the next.
- [14:59]
Ryan Deiss
Well, I think the thing that's required to get to step two is you have to de. Escalate the emotional aspect of this. And this is the thing that's. That again, is funny to me to watch from the outside because everybody's freaking out. And again, like, I get it to a certain, to a certain extent, like, same kind of thing. I don't want prices to go up. I'm looking at my stock portfolio and on paper, I've. A tremendous amount of my net worth has been cut, you know, in the last little bit. I don't like that. You know, now it's paper unless I sell, which I've already said don't. But what everybody does. And you're seeing it. You're seeing it playing right now in real life and the media is playing into it so much. But in business negotiation, this happens too, especially for people who are new at this. They let their emotions get the better of them and they take it personally. And the phrase, it's cliche. It sounds trite, but it's so true. It's just business is so incredibly important to keep in mind at this time. And so somebody in negotiation comes and they says something. Let's say you're on the receiving end of this, right? So there's a deal, and somebody comes in and they make a claim that you feel like is completely outrageous. If you get offended and you get blustery and you're like, well, that's it, we're done. You might feel a sense of righteous vindication that just makes you feel really good. But you just close the door on any potential deal. And so I say to people all the time, would you rather be right or would you rather be rich? You can always, always, always Go nuclear, which is why it shouldn't be your first option. And right now what you had is everybody saying, you know, you've got Trump coming out and saying, this is what we're doing, tariffs. And the media's acting like he's already just blown up all of these relationships.
- [16:46]
Roland Frazier
I know.
- [16:46]
Ryan Deiss
Well, what we know is you've got very mature grownups, diplomats on both sides, who have dealt with far higher stakes negotiations than anything that you have. I, and I've been on and they don't get emotional about these things and they're like, this is what we think. It's like, okay, well. And they're just going to have a conversation. And as long as you can have the conversation, that's what gives you the ability to do step two, which is to come back to the table. And I think so many people, they get offended and they get upset and they burn the bridge. And there is no returning to the table because you've created circumstances such that the only way you can return to the table is to do so in a way where status is so diminished that nobody in their right mind would do it. So just keep it as non emotional as possible. It really is just business. It's just business.
- [17:37]
Roland Frazier
Yeah. The third thing I think, and it's interesting to watch also, it's a great tactic and it is to demonstrate a willingness to escalate. And so it starts with, we need to talk about tariffs. Then it goes to, well, nobody's coming to talk to the table or, or they are saying that they're not going to do anything. So the next step, the next escalation is we're going to implement the tariffs which has happened here now. And then the response is an escalation which is a measured response of, well, if you have raised tariffs, even though our tariffs are already higher than yours, our escalation is retaliatory tariffs. We're going to, we're going to match, you know, or, you know, or meet those. And then Trump comes back with, to China just today, an extra 50% if you don't match the tariffs and stop this business. The total combined tariff as proposed currently today would be 104% on any good that comes from China. He's like, not afraid to be like, you know what? Double.
- [18:52]
Ryan Deiss
Yeah.
- [18:53]
Roland Frazier
And then it's, it's saber rattling, it's brinksmanship, whatever you want to call it, but it is a willingness to escalate to show that you are serious. An escalation could be that we walk away from the negotiating Table. That is an escalation. It's difficult, though, because if you walk away from the table whenever you come back, you know, if it's too quickly is actually a concession. And it's a. You know, I was. I was bluffing. So I don't believe that he's bluffing. I believe that he absolutely would put another 50% on and let it simmer. And I think if you look at how fragile several of the economies are, particularly autocratic economies like China. Right. That while they've got their army to beat their people into submission, this is how revolutions happen. And so you got to be careful, you know, about thinking. And this is going to be my fifth thing, which is managing, you know, managing the environment around you, which might be domestic versus international, or it might be, you know, know, your other suppliers versus you, you know, your employees, your customers, your internal team.
- [20:06]
Ryan Deiss
Yeah, exactly, exactly.
- [20:08]
Roland Frazier
But. But this willingness to escalate is absolutely critical. That's why we say you've got to always be willing to walk away from the table. You can threaten to walk away from the table if certain things aren't done. You know, that can be a bargaining chip. But whatever you're dealing with, you should definitely think, you know. So let's say that. That my wine rental locker, you know, says we're raising rates 20% because you signed up for promotional rate. And that was, you know, a few years ago, and that's run out, and we forgot to raise your rent. So it's going up, you're losing that, plus the normal increase that we would do. And I say, you know what, There are other options. I was thinking about shrinking my collection anyway. If you're going to raise the rate like that, I'm either going to leave or significantly reduce the amount of space I've got now. They could say, well, we were actually giving you a break. And so if you're going to want to stay here and you're going to reduce the space, smaller spaces cost more, so your rents would actually double. So you really ought to take the deal that you've got, because you'll get twice as much space for half the price. You know, and now I'm left with, well, I do have all this wine. Do I want to sell it? Do I not want to sell it? You know, I can't drink it. We'll die. You know, so what is a lot of wine?
- [21:22]
Ryan Deiss
It's a big wine collection, folks.
- [21:23]
Roland Frazier
So, you know, so. So that's the escalation. So I think that's the. The next step. And then real quick, before we move.
- [21:29]
Ryan Deiss
On to the next one though, because there's, there's kind of that other meta step in between where, because we talked about how to, to make the transition from step one to step two work, you have to remove emotion. I think to make that, that escalation step work, you have to do your research and run the numbers. Yeah, and this is so important because people negotiate from an emotional state and not from a logical state. They don't run the numbers to say, okay, if we escalate to this level and it happens and they call our bluff because it's not a frickin bluff.
- [22:02]
Roland Frazier
Yeah.
- [22:02]
Ryan Deiss
Then what? And you've got to be able to run that scenario and make sure that scenario is acceptable to you. So going back to your far, while I know, extreme and heartbreaking, but not quite to the level of, you know, kind of trade war type stuff, but going back to your, it's basically the same thing. Your, your wine locker, you know, situation. If you're going to say, look guys, you know, if you're going to do this then, then I'm out. You should probably think through number one, are there competing places? Like maybe get them on the phone and say, hey, you know, Bob's wine locker down the street is saying they're going to raise them this, to this. You know, if you guys can match it, I'll have my wine sent over to you tomorrow and maybe sign a 12 month contract. You know, like if you've got that in your back, you don't want to move. But if, you know you have now, if they're like, you're out of your freaking mind. I can't believe they do it for that. We lose money.
- [22:51]
Roland Frazier
Okay, so if nothing else validated the position. Right. Which is helpful. Yeah, yeah, yeah.
- [22:58]
Ryan Deiss
Or and then maybe you go, okay, well then am I willing to just store it in my own house? Like what are, if I, if, if before you say it, if I'm going to escalate to this point and they call me on it, can I then say, okay, can I do again the second equivalent of walking away? Because you do not want to be like, oh shucks, guys, never mind. Never ever, ever put yourself in that situation if you're not willing to pull the trigger. And that's what everybody keeps saying in the media. Like, oh, he's not going to do this. Oh, he's just bluffing. Oh, this is just negotiating. That's not the way this works. Like real professional negotiators don't just throw stuff out there that they can't deliver on. They just don't because they know they'll lose credibility forever.
- [23:38]
Roland Frazier
Right? Yeah. And so one of the things that we like to do is sensitivity analysis or multi scenario multiple scenario modeling where we say, if this, then this is what results. If that, then this is what results. And then we get to look at all those and say, which of these are acceptable that we're actually willing to do and which aren't. And we throw out the ones that we aren't because as you said, we would lose credibility. But we now have a menu of options that we can come back with, which is where I go. It's a good segue. So you go from this escalation stage into a conditional pullback from the hard line position based on concessions, which is basically to say that you are flexible. And I think that this.
- [24:32]
Ryan Deiss
Essentially a ceasefire.
- [24:34]
Roland Frazier
Yeah, this, this administration's done a good job of that. They escalate by saying it's going to be 50% if you don't come to the table. But they left themselves an out because they didn't say, come to the table with zero reciprocal tariffs. They just said, you got to come, you got to come back to the table with something. So they're causing these guys to negotiate against themselves, which I think is smart. And they're also saying, yeah, well, I mean, we're talking to the UK and if the UK can come up with something, you know, we're kind of thinking this 10%'s gonna be a base. You know, this 10 new 10% tax tariff on the UK stuff is gonna be a base. And the UK is like, yeah, well, then, you know, we're probably gonna always hold onto ours. And then you can back off from your hardline position of that's gonna be the base. That's just how it is to. Well, I mean, we're willing to talk, of course. What are you willing to do that might allow us to not have to make that the base? That's a really good way to go at that. And it's a nuanced way too, I think, to think about big move to get you to the negotiating table. Mutual benefit, kind of collaborative, zone of fairness. Concessions are good for everybody to escalation to. Yeah, but obviously we're reasonable people, you know, Right.
- [26:02]
Ryan Deiss
We're.
- [26:03]
Roland Frazier
If you push us to the wall, we will escalate, you know, but we're fair. So let's talk about that. I think that's, you know, it's a brilliant way to negotiate. It's Also truly just shredding the emotions of the other side. You know, it's like, you know, we don't have to do anything. You guys depend on us for all your stuff. Ha. You know, like.
- [26:24]
Ryan Deiss
Oh, yeah, screw you.
- [26:25]
Roland Frazier
What? You know, Wait, wait, wait, wait. You know. Well, but I mean, we'll talk, you know, okay, we'll talk, but we're not coming off of that. Okay, then we're gonna triple down on what we did. What? No, you know, they can't do that. You know, but of course we're reasonable if you are. You know, it's just this, this roller coaster ride which, which really causes turmoil everywhere because. And that gets to the. To the fifth, to me, big takeaway, which is managing the, the, let's call it inter party emotions or, you know, perspectives or reactions. The administration, I think, has done a great job because they're like, number one. Hey, America, here's a chart. You see all these super high things and these low things. All these guys are ripping you off. We hate being ripped off. No ripping off. You know, screw those guys. Right? And.
- [27:22]
Ryan Deiss
And then it's on those low things mean you don't. We don't have to pay as much for our stuff. But, you know, that's.
- [27:28]
Roland Frazier
Yeah, yeah, yeah. But, well, but then the media comes out and says, oh, yeah, well, everything's going to cost more. And they say sometimes you have to take your medicine. And you see middle America polling out at, you know, president's right. Sometimes you gotta take your medicine. You know, can't let these people get ahold of us and not do this. And that's how all people from the middle of America talk, by the way.
- [27:51]
Ryan Deiss
Yeah. Just so we're clear before all of our redneck friends out there get offended, Roland was actually born and raised in Virginia, so he can do that voice. Yes, he's allowed to.
- [28:00]
Roland Frazier
My whole family is way, way, way to the. To the other.
- [28:03]
Ryan Deiss
He's from Virginia, but.
- [28:05]
Roland Frazier
But that's it. You know, like people are saying that, yeah, that the president's right, that we, we do need to take our medicine and it's not fair. And sometimes you just got to stand your ground. But then he paints on the other colors of. We've already made, after just a day, tens of billions of dollars in profits from tariffs that did not exist before. And people are like, oh, really? He's like, you're talking about, how are you going to satisfy the deficit? All these countries that think that they can charge us and that we'll just sit here and take it. And not charge them for all the stuff they're bringing in, which is costing you jobs, which is driving up the cost to manufacture in the States. While it's, while over there it's less. That's not fair, is it? While I'm fixing that for you. Yeah, the stock prices might go down, but just don't sell. Yeah, we might have to take our medicine for a minute. But you know what, we've already got billions of dollars coming in, man. To me, that's just brilliant. It's a brilliant positioning of something that the media is, is like bad, bad, bad, bad with the billions. Right. I think that that's like managing those. They're doing a good job of managing that. I remember when everybody was like with, with Trump's wall back in the day, right? It was like they were like, you can't build a 20 foot wall, blah, blah, blah, blah. And they were all doing this at a big rally. You know, somebody was heckling or something and he's like, you know what? That wall just got 10ft higher.
- [29:42]
Ryan Deiss
And it was like, yeah, you know.
- [29:45]
Roland Frazier
And there was no wall. You know, it's.
- [29:47]
Ryan Deiss
Yeah, there's nothing. Yeah.
- [29:48]
Roland Frazier
So I do.
- [29:50]
Ryan Deiss
You'll probably, in a business negotiation never have to also be playing against the media, like trying desperately to make the other, the other side's case, which is effectively what is happening right now. And again, whatever your politics are, you have to, you can't deny that that is in fact happening. Right. Our own domestic media is basically saying that the President and its administration is wrong and stupid and foolish and all this stuff is bad. So they've got to make their own case. But I think that they're, like you said, they're executing it because their communication internally. Everybody's on the same page. And this is so critical. If you ever, ever, ever, ever, ever want to completely undo the other side's negotiating position, get just one person from the other side to admit that there's some cracks in the wall, to admit that maybe they're willing to come off a little bit, to admit that maybe they're being just too twinge unreasonable. When you are negotiating in business, in life, your entire team needs to be singing from exactly the same playbook, at least out loud. And this is the case. Like when, when you and I were doing the sale tnc, I'm flipping out. You and I were not on the same, singing from the same playbook. I was ready to murder you. I was letting my emotions get the better of me. I was not in a good Place emotionally. But I never, ever, ever let that be known to them.
- [31:16]
Roland Frazier
Yeah.
- [31:17]
Ryan Deiss
As far as they were concerned, I was as in it to win it and ready to walk as you were now I was texting you all kinds of foulness that.
- [31:24]
Roland Frazier
Yeah, thank God they apologize for. Yeah, but.
- [31:28]
Ryan Deiss
But that's important. Do not fight in front of the kids. Do not. Do not. Do not let the other side see that there. That there's any room whatsoever between. Between you and the other members of your team. Because this communication is critical.
- [31:42]
Roland Frazier
Yeah. Unless it's strategic. If you're a good cop, bad cop or something like that, then that, that can be effective. But yeah, that's.
- [31:49]
Ryan Deiss
That's a double black diamond move, though. That's a little advanced. We're talking like green and blue slopes at this point.
- [31:54]
Roland Frazier
So basically we said use your leverage to get the people to the table. Then position the benefits as mutual, collaborative, not negotiating. Not one party wins, the other person loses. But every concession is a mutual benefit. Then be willing to escalate. Signal your willingness to escalate. Don't be afraid to escalate, but be careful. It's. Somebody told me this, they said, yeah, be careful. You know, it's like the guy at the fair, you can blow, you know, that blows himself up. You can blow yourself up. It's a great trick, but you can only do it once. You know, that is something to remember. And then maintaining your flexibility, post escalative threats. So you are either escalating or threaten to escalate, but you are keeping room for making adjustments to that. Some people might call those concessions, some people might call it compromise, however you want to frame it, and then managing the emotions of the stakeholders because different people will have different stakes in the game, whatever's going on. For example, I'll very, very often position, excuse me, position the person who I am negotiating with as a human against the entity that they represent. I will say those guys or I know the company says this, you know, but we are going to work this out. So I'm trying to form an alliance with the person, the human that I'm actually having the dialogue with, and that our goal is to get to a resolution. Not, not to one that's not fair to them, but just our goal is to make this go. And there are these unreasonable demands that are being made by these other people or these other entities that aren't us. We're just trying to get. Well, can't we just get along? You know, can't we just work this out? You know, and that is very, very effective, too. And so that managing those, those stakeholder interests is the, is that kind of fifth key category. So I think, like, I think there's a lot to unpack of positive takeaways on how to do this stuff. You know, how this negotiation is going. Excuse me? How to negotiate from how this negotiation is going, despite the horribly lopsided reporting of it and the complete ignorance of, of the fact that this is a negotiation, even like. And maybe it would, maybe it would deflate. Maybe it plays to Trump. You know, maybe it's in his interest to have the media so down on it because everybody else sees it, but maybe it's undermining his ability to negotiate effectively because the rest of the world is like, look at the pressure he's under, you know. But of course, Trump has a huge benefit because he's like, I don't really care. You know, I'm in my final term, you know, whatever. Yeah.
- [35:00]
Ryan Deiss
Going back to leverage. Yeah.
- [35:02]
Roland Frazier
Right.
- [35:02]
Ryan Deiss
Yeah. You don't want to play, you don't, you don't want to play, you know, chicken against somebody who, you know, has a terminal illness. Right. I mean.
- [35:09]
Roland Frazier
Yeah. And that's where he is early enough. It's early enough, though, that he's not a lame duck. So he's like, okay, guys, you know, yeah, I might be out, but you got four freaking years of this. Three years and three quarters to go. Do you want to live with this during. I mean, it's pretty brilliant if you ask me, as a strategy. And I would say this if it was coming from, you know, Kamala Harris or Kamala Harris, if she had won. To me, it's, it's not the player, it's the game. Right? The game.
- [35:38]
Ryan Deiss
And I, and I think it's just nice to see politicians actually, you know, doing negotiating. And whether you believe, whether you agree with the. So many people are kind of upset with the, with the tactics of it. Like, it, like it's mean. This is what actual real life negotiating looks like. It's now just happening in public. And that's what, when we, you know, our episode that we did a month or so ago, that's what we talked about. What you're seeing here is the down and dirty, nitty gritty in the trenches negotiating happening in public, that normally doesn't happen in public. And everybody's getting all. Yeah, so you got such an opportunity to learn. So how do you think, I mean, so setting aside the lessons and the learnings, predictions, how do you think it's going to work out?
- [36:20]
Roland Frazier
I mean, I think we've already seen multiple parties coming back saying we're at the table, we're willing to do reciprocal 0% tariffs. I think that that's going to be a lot of it. I think the, there will be positioning. I know that the Prime Minister in the UK I'm having a hard time keeping up with them because they've gone through so many, so, so recently. That's for all my, my, my British friends. Now the Prime Minister in the UK said, you know, we will do what's in the best national interest of the uk well, of course, but in the best, what's in the best national interest is we should trade. And here's the deal, because this is what it, to me, it all boils down to. If the United states has a 10% and the UK has a 10% or the EU does and you know, so on and so forth, whoever trades more is going to be hurt more. Whoever trades less will benefit less. So why not just, if they're going to be reciprocal, why not just benefit humanity and wipe them all out? Like if we've evened it out so that it's not. If we're talking about fairness to our citizens, you know, and the government can get enough money not doing the tariffs then, and it probably does by having the economies be propped up and not hurt the way that they are temporarily being hurt right now. I think that they either go away or they equalize, but I don't think that it stays the same. I think the game definitely changes and it changes for the United States as the winner short and long term.
- [38:04]
Ryan Deiss
So going into the fourth quarter, you think kind of prices and tariffs have kind of normalized and the, the, like, the, because the stock market is not the economy, but like the economy is maybe stronger and the stock market's back up.
- [38:18]
Roland Frazier
I do, and, and I'm waiting like I'll, I'll defer bringing in the things that are discretionary for me to bring into the country because I think that I would be paying, you know, I could be wrong and maybe it'll double, but, but I think I could be paying unnecessarily for, you know, something that isn't going to be there even in a quarter. I feel like this is going to be quick, like, you know, within the next quarter. I think by Q3, I think we've got the tariff thing ironed out pretty much the way it's going to be. What are your thoughts?
- [38:51]
Ryan Deiss
Yeah, I tend to agree that I was looking at the number because I Said it earlier, but I didn't have the actual number, so I just googled it. So By June of 2025, the US government needs to refinance $9 trillion worth of debt. So do they want to. And the majority of that still is to be refinanced. So do they want to refinance that debt at high interest rates or low interest rates? They want to obviously refinance it at low interest rates. So I think they're totally fine with the stock market being down. Because when the stock market is down and when people are nervous, what do they do? They buy treasury bonds. When people buy T bills, what happens to interest? Interest rates go down. Right. There's more people showing up at, at the auction to buy US Debt when everything's scary out there. So they benefit in the short term by the economy, the stock market dipping because then more people want to buy this debt which lowers the interest rates. I think that they're perfectly happy to let negotiations be. This is the cynic in me. But I think it's also true be chaotic and nuts through about June or July and then at that point, show me the incentive. I'll show you the outcome at that point. Once all the debt's been refinanced now they're incentivized to let everything come back. And they're definitely going to want it looking pretty again in the next 12 months because that's when you start getting into the midterms. And so that's just when. That's when you're going to see it start to even out. So I do think that they're going to see tariffs stay high in certain areas on things that can and should be produced in the States because you did have with a lot of the free trade, that's where you had a lot of central part of the country just getting gutted.
- [40:35]
Roland Frazier
Yeah.
- [40:36]
Ryan Deiss
And where you have companies committing, they don't even have to build them yet. They just commit. We commit to building this factory here.
- [40:42]
Roland Frazier
Cool.
- [40:43]
Ryan Deiss
You're exempt from tariffs, but you better build it.
- [40:46]
Roland Frazier
Yeah.
- [40:46]
Ryan Deiss
We're going to slap you with penalties and back tax on all those tariffs. So they're getting a ton of commitments. And I think between all those things. Yeah, I think it's probably. It's going to be a little bit of pain for a quarter or two and then I think it's going to. Going to rebound. And that again, that's, that's my hope. And like you said, I'd be saying the same thing if it were a D in charge and not an R. Just I want us to win. I want, you know, I want everybody to do well.
- [41:15]
Roland Frazier
And I. And I.
- [41:16]
Ryan Deiss
And I think it did get out of whack. And I think like you said, sometimes when that happens, you gotta. You gotta do big things to get people to the negotiating table. That's what's happened.
- [41:24]
Roland Frazier
Love it. I love it. Well, hopefully you guys enjoyed that. And if you did, we would love to hear from you. If you've got thoughts, we would love to hear from you. We talked recently about a viral post that Ryan did. So maybe this will be our viral post where everybody comes and says you guys are wrong. That's okay with us. Just let us know. And hopefully you see the value of the five different things that we talked about that can benefit you in your own negotiating, no matter who you are, whether you own a country or don't. So that's it for this show. We'll see you next time on Business Lunch.
- [42:09]
C
Hey, Roland Frazier here.
- [42:10]
Ryan Deiss
If you're looking for a way to.
- [42:12]
C
Grow your business exponentially to get more customers and ultimately increase your wealth, there's no faster way to do it than to acquire other businesses that already have the customers, products, services, teams and media that you want.
- [42:24]
Roland Frazier
If you want to double your sales.
- [42:26]
C
Just acquire a company that has the same sales as yours. It sounds simple, but far too many people end up starting new businesses that fail and forget that they could skip all the hard stuff and just acquire one that already exists. There's a reason why private equity firms, family offices, big companies like Apple, Google, and some of the smartest entrepreneurs on the planet do not start new businesses from scratch. They acquire already successful businesses, and when they do it, they instantly increase their sales, their profits. If they want market share, they increase that. They can get new products and services to offer all instantly. Hey, look, 90% of new businesses fail. 90%. Why not acquire an already successful business and increase your chances of success by 900%?
- [43:15]
Roland Frazier
What most people don't realize is you.
- [43:17]
C
Can acquire highly profitable businesses with no money out of your own pocket in pretty much any country in the world, regardless of your credit and without having to go find a bunch of investors or needing any experience. Look, I've been acquiring businesses for over 30 years now, and I cover the whole process in my EPIC Investing strategy training. And I want to give it to you 100% free. Just visit businesslunchpodcast.com epic to get your free access to my EPIC investing training right now, while it's available.