Podcast Summary: Business Lunch – "The Business of Diplomacy: Understanding the Current Trade Wars"

Release Date: April 18, 2025
Hosts: Roland Frazier and Ryan Deiss

Introduction to the Current Trade Wars

In this episode of Business Lunch, host Roland Frazier and co-host Ryan Deiss delve into the complexities of modern trade wars, particularly focusing on the recent tariffs imposed by the United States. The conversation centers around whether these tariffs are primarily a means to generate revenue or strategic tools for negotiation and leverage in international trade relations.

Notable Quote:
Ryan Deiss [00:46]: “I actually think they've run the calculus and what they are, what they're betting on.”

Analyzing the Purpose Behind Tariffs

The hosts discuss the multifaceted objectives of tariffs beyond mere revenue generation. Ryan Deiss posits that the imposition of tariffs serves as a strategic move to exert pressure on trade partners, potentially leading to favorable negotiations. He emphasizes that the long-term benefits for the U.S. may outweigh the short-term pain for consumers and businesses.

Notable Quote:
Ryan Deiss [03:14]: “I think that in the medium to long term that America wins no matter what.”

Negotiation Strategies in Trade Wars

Roland and Ryan outline five key negotiation strategies derived from observing the current trade tensions:

1. Leveraging Difficult Positions to Bring Parties to the Table

   • Roland Frazier [06:12]: Discusses how imposing high tariffs can compel trade partners to engage in negotiations, turning a seemingly one-sided conflict into a dialogue opportunity.

2. Framing Concessions as Mutual Benefits

   • Roland Frazier [10:46]: Emphasizes the importance of presenting concessions in a way that benefits both parties, fostering a collaborative negotiation environment.

3. Demonstrating Willingness to Escalate

   • Roland Frazier [17:37]: Highlights the tactic of escalating demands to show seriousness and preparedness to walk away if necessary, an approach often associated with brinkmanship.

4. Conducting Thorough Research and Logical Planning

   • Ryan Deiss [22:01]: Stresses the necessity of backing up negotiation tactics with solid research and realistic scenario planning to maintain credibility.

5. Managing Stakeholder Emotions and Perspectives

   • Ryan Deiss [31:37]: Advises keeping negotiations emotion-free and ensuring that all team members present a united front to maintain negotiating power.

Notable Quote:
Ryan Deiss [11:00]: “You have to have some courage. You've got to have some courage.”

Real-World Application: US-China Trade War

Applying these strategies to the ongoing US-China trade war, Ryan and Roland analyze the tactics employed by the U.S. administration. They observe that the strategic imposition of tariffs aims to pressure China into the negotiating room, where mutual benefits can be negotiated. The hosts point out that despite immediate consumer costs and market volatility, the long-term strategy likely favors the U.S. by encouraging domestic production and reducing foreign dependency.

Notable Quote:
Roland Frazier [35:09]: “You don't want to play, you don't want to play, you don't want to play, you know, chicken against somebody who, you know, has a terminal illness.”

Predictions and Economic Implications

Looking ahead, the hosts predict that the trade war will lead to a short-term economic dip but ultimately result in a more favorable position for the United States. They anticipate that tariffs will normalize within a quarter or two, with successful negotiations leading to reciprocal agreements. This stabilization is expected to aid in refinancing the U.S.'s substantial debt at lower interest rates, ultimately benefiting the broader economy and stock market.

Notable Quote:
Ryan Deiss [38:18]: “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.”

Managing Media and Public Perception

The episode also touches on the role of media in shaping public perception of trade wars. The hosts note that government communication strategies aim to unify internal stakeholders while managing external narratives through media manipulation. This dual approach ensures that negotiation tactics remain effective despite public scrutiny and criticism.

Notable Quote:
Ryan Deiss [29:49]: “As long as you can have the conversation, that's what gives you the ability to do step two.”

Conclusion: Lessons for Business Negotiations

Roland and Ryan conclude by extrapolating lessons from international trade negotiations to everyday business scenarios. They reiterate the importance of leverage, mutual benefits, escalation readiness, thorough preparation, and emotional management in successful negotiations. These principles are applicable whether negotiating large-scale international deals or everyday business transactions.

Notable Quote:
Roland Frazier [41:24]: “So, you can threaten to walk away from the table if certain things aren't done... managing the emotions of the stakeholders because different people will have different stakes in the game.”

Final Thoughts

The episode provides a comprehensive analysis of the current trade wars, offering valuable insights into the strategies and outcomes of such high-stakes negotiations. By dissecting real-world actions and their implications, Roland Frazier and Ryan Deiss equip listeners with practical negotiation tactics that can be applied across various aspects of business and personal dealings.

Note: The episode concludes with promotional content and advertisements, which have been excluded from this summary to maintain focus on the core discussion.