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Mike Pesca
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Mike Pesca
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Barry Nailbuff
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Mike Pesca
Hi, if you're a Pesca plus subscriber, we invite you to stick around after hours for this month's version of the book club. Wanted to have my old friend Ben Limberg come by. He's one of America's best baseball writers and thinkers and talkers. So we will be talking babip. But he's also a great culture writer, so we'll be talking Severance and White Lotus. Maybe we'll be talking about how all those things overlap. I don't know. What would that be? Perhaps the suicide squeeze. I don't want to ruin anything from Prestige TV or last night's Rockies Mariners game. Tilt. Rockies Mariners tilt. So Ben Lindbergh will be by in order to experience this. All the other book clubs. All else we do live events. The show without any ads. The show with extra bonus content. Go to subscribe.mike pesca.com we're adding more every day. Hope to see you on the 24th. It's Monday, April 14, 2025 from Peach Fish Productions, it's the gist. I'm Mike Pesca. So the Liberation Day hubbub turned out to be hoopla full of fodder, all with the added benefit of possibly tuning investors into the fact that we're now in a recession. There is one man you might want to hear from. Or not. Howard Lutnick, the Commerce secretary is to tariffs, but director Russ Meyer was to bosoms in generally very pro, but even more favorable the bigger they are. So at issue was the fact that on Friday, Donald Trump having pulled back from tariffs beyond 10% with every trade partner other than China Soft tariffs on key items with China as well, smartphones, electronics, iPhones, that sort of thing. This was a major retrenchment. Except to hear Lutnick tell it on this Week. This week was nothing of the sort. So, so you're saying that the big tariffs on things like smartphones and laptops, iPhones, all those iPhones built in China, that those tariffs are temporarily off, but they're going to be coming right back on in another form in a month or so, or what are you saying?
Barry Nailbuff
Correct.
Mike Pesca
That's right.
Barry Nailbuff
That's right.
Mike Pesca
These are included in the semiconductor tariffs that are coming and the pharmaceuticals are coming.
Barry Nailbuff
Those two areas are coming in the next month or two. So this is not like a permanent.
Mike Pesca
Sort of exemption, which would be great. I mean, you'd like to believe him when he says that, trust me, the tariffs are not going away. Only here he was on CNN a week before Trump backed off his tariffs.
Barry Nailbuff
I don't think there's any chance they're going to.
Mike Pesca
That President Trump's going to back off his tariffs. And here he was on Face the Nation three days before Trump decided his tariffs wouldn't stay in place. So the Treasury Secretary said on another network, we're going to hold the course. It's not the kind of thing you can negotiate away in days or weeks. That makes it sound like the tariffs are staying in place at least for days. Or is that correct? Or is the president considering postponing implementation to negotiate?
Barry Nailbuff
There is no postponing. They are definitely going to stay in place.
Mike Pesca
But you know what? I'm glad he wasn't even asked the how can we believe you? Follow up. That'd just be another chance for him to talk about the glory of tariffs, another chance for Trump to become offended that someone dared not to believe a cabinet secretary who. Who was being disloyal to Trump's policy. Even if Trump himself backtracked on the policy. A little bit of disloyalty there. So last night, Donald Trump put up a post on Truth Social saying, quote, these tariffs are subject to the existing 20% fentanyl tariffs and they are just moving to a different tariff bucket. The fake news knows this, but refuses to report it. Mr. Trump, let me say, speaking on behalf of the fake news, I think I'm not duly elected to do so, but I think in general, I could speak on their behalf. We do not know that. We do not know anything. We're not saying that you're wrong. We're just saying we very much do not know. It is a. Oh, shall we say we bit unclear. And I'm going to suggest that history says very slightly, subject to change on the show today, a spiel about one of the items in the middle of this tug of war, this game of chicken. It's chlorinated chicken and the specter of the treated poultry has been haunting the British Isles. But first, back to the meta question of what Trump is doing. Well, he'll tell you it's all strategic and it's all negotiation. But you know, there are different forms of strategy and there are different ways to negotiate. Just because you say it's strategic doesn't mean it's a good, wise or coherent strategy. Now, it's easy for a Trump critic or just really anyone trying to navigate the last week to say Trump is just lying, he's just winging it. And yes, to be fair, there are elements of, let us say, deception and improvisation to his techniques. But what I really wanted to do was to drill down on what Trump's strategy might be, not quickly jumping to he's right or he's wrong, he's effective or he's ineffective. But let us try to earnestly puzzle out what his strategy and tactics could plausibly be. And with that as a basis, let us assess if they're the right tactics for him to get to his goals as he sees them. And there is no better guide for all of this than Barry Nailbuff, Yale business school professor, author of several books on negotiation, a veteran of several huge negotiations himself, Barry Nailbuff. Up next.
Phil Morehouse
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Mike Pesca
So I've been thinking a lot about the Trump tariffs. We all have. The markets have. And as the markets, well, the markets do what the markets do. They price it in, they price it out. They make, they make predictions about what will happen. I took a step back and I started thinking, okay, not in terms of what this may mean for the economy and GDP and inflation, what it may mean, what the motivations may be in terms of Donald Trump himself as a strategist, as a negotiator, core to his self identity. And there are examples of him negotiating successfully in many deals. There are certainly examples of him not doing so. There are ubiquitous examples of him telling us that's what he's doing and telling us that he's such a successful negotiator. Sometimes the facts bring this or back this up. So let's talk about Trump's negotiating tactics and strategy. And I have some theories. And I know so too does my guest, Barry Nail Buff, who is the Milton Steinbach professor at the Yale School of Management and is the author of so many books. What I have here is one that he was on the show for Split the Pie, A Radical Way to Negotiate. Hi, Barry. Welcome back to the Gist.
Barry Nailbuff
Well, thanks for the honor. And in that regard, I've comprised a little limerick for you.
Mike Pesca
Okay. Now we should say Barry is also one of the founders. I'm holding up many products on our video. He's one of the founders of Justice Tea, and they commissioned a poet. They, you know, are patrons of the arts, and they commissioned a poet to write some limericks on their cans and bottles is what they're known for. That poet was me. I'll read you one of the limericks I wrote on one of their cans, but. Okay, do it now. Barry, give me your limerick.
Barry Nailbuff
Thanks for having me back on the gist. I just hope my dean won't be pissed. Chatting with Pesca beats trippin on ayahuasca. Let's talk about tactics Trump missed and what he got right.
Mike Pesca
Yes, let's. And compliments. I know you're a canned beverage man. Not to rhyme Pesca with Fresca. It must have been very tempting. But to go on the ayahuasca, I'll allow it. So here's, here's. And that was great. Here's What I was thinking, Trump wants to re establish some credibility, if you want to call it that. There's probably a better word for it in negotiation world. But Trump knows that he had a couple of series of tariff threats and he backed off. And he probably, I think, wanted to say they need to take me more seriously and not to think that I will always back off. He probably also, before this round of tariffs, looked at the markets and saw that the markets were doing well, which you might think would please him. But the reason the markets were doing well is the markets generally discounted how serious he was about going through with his tariffs. So do you think there is anything of that sort going on in the Trump mind?
Barry Nailbuff
Let's start with what it means to take an extreme position. So a lot of folks, and Trump in particular, believe that you should start off with a extreme anchor, just something that's sort of way away from where you end up. And there's some view in behavioral economics that that works, that you somehow change people's perception of how many countries there are African countries in the UN if you ask people, is it above or below 10 or is it above or below 100? The problem is those extreme anchors in negotiation can backfire and you can get sunk by your own anchor. So in particular, let me pick one of my negotiations. Somebody wanted to sell something to me and they started with an asking price of 2,500. And I tell them I can get it elsewhere at 1300, and they come back and say, okay, 1100. So I have two views right away. One is if they went from 25 to 1100, they're going to move again. And when they say this is their final number, I don't believe it. And I also realize that they're trying to take advantage of me because the 2500, if I had said yes to it, I would have been a real sucker. And I think the same thing is happening here, which is by taking such an extreme position, which nobody believed was actually going to happen, he was then forced to make a U turn, a very large move. And now when he says, I'm going to stick to it, I'm not sure people, you know, have any reason to.
Mike Pesca
Believe to that, believe that what he has to do is what he did with the announcement of the tariffs, or he doesn't have to, but it would fit in with this way of thinking. I'm going to come in with shockingly high numbers and stick to my guns, or seem to stick to my guns for a few days, even in the face of A huge market sell off.
Barry Nailbuff
Yeah. And he did it for just a few days. So let's take a step back and ask what is the objective here? Because how effective the negotiating tactic is depends on what you're trying to achieve. And there could be four different outcomes that you'd like. One is that you're trying to get other countries to go to a zero tariff against the United States. Another is that you're trying to raise money from tariffs. Another issue trying to move to an autarky, a situation where we basically don't have trade across countries. And the last is you just want world leaders to line up to kiss your ring. And it's about an ego trip and you want to get a lot of headlines. So if your goal is to get zero tariffs from the other countries, actually his approach could be very effective for that.
Phil Morehouse
That.
Barry Nailbuff
I mean, as he says, There's 75 world leaders who are ready to say Vietnam, Israel, whatever, you know. Yep, zero tariffs. Right, Right.
Mike Pesca
The willingness to show that we, as the United States will take pain, we have more resources, we're gonna inflict pain upon you, and the. And your negotiating or partner will conclude it's in their rational best interest to go down to zero.
Barry Nailbuff
Absolutely. Now, of course, you didn't actually have to attack everyone all at once to make that happen. You could have just picked a few examples, like go after Columbia University, go after Paul Weiss, just kind of make an example of a few people, and then everybody else would also have fallen in line. So why go after the whole world at once? And I think the answer is, well, you just want the image of the 75 world leaders lining up to kiss your ring right now. If your goal is to get zero tariffs, that's fine. And like I said, we're well on the way to doing that. But then you're not going to raise a lot of money from tariffs. And so you can't both have zero tariffs and use tariffs as a revenue source. Plus, the tariffs were so high that we were on the wrong side of the Laffer curve. You're not going to get any tariffs from Jaguar Land Rover when they stop sending any cars to the United States.
Mike Pesca
Yeah. And explain, if you will, the curve drawn by Arthur Laffer on that fateful napkin that day.
Barry Nailbuff
Yeah. So the idea was that if you have zero tax rate, you certainly don't raise any revenue. As you start raising taxes, you. You raise more money, but at some point you raise taxes so high people stop working. And so then you don't raise any money again. And here if you raise tariffs so high that nobody sends things to the United States, well then you're getting a high rate on zero volume and again, you make no money. So there's some tariff number which could maximize tariff revenue. And he went well beyond that.
Mike Pesca
Okay, so I want to maybe, maybe pose my questions and acknowledge I'm doing so with maximum beneficence towards Trump. It is true that there are, that it is contradictory to say, as Peter Navarro did, this is great, we're going to put $6 trillion in the treasury because of this. But then to also say, this is great because we're going to get our trading partners to negotiate because once they start negotiating, that $6 trillion start going, starts going down. So that's at odds. On the other hand, strategically, tactically, from a negotiating standpoint, if you really did want to negotiate, wouldn't you tout how great it's going to be that you're putting 6 trillion in the Treasury? Wouldn't you want to give the appearance of, hey, look, I don't have to budge at all. I'm happy with my $6 trillion that's gonna be coming into the treasury, at least. Saying that publicly does seem to actually not contradict, but dovetail with the goal of spurring a negotiation.
Barry Nailbuff
Well, again, you wouldn't pick tariffs that are so high that you're not gonna bring 6 trillion into the Treasury. You pick numbers that might maximize the tariff revenue here. And I said he went well beyond that in terms of the sizes that he was talking about.
Mike Pesca
Also I have also heard the criticism, what I just said, that it's self contradictory to talk about the amount of revenue you're going to gain from tariffs, but also talk about how they're a negotiating tool. And you know, he has different factions within his administration. They were all very happy to publicly proclaim that theirs was the true faction. But I think about syntaxes, right? The idea that here's what we're going to do, smoking is bad, so we're going to put a tax on cigarettes. And the great thing is all the revenue from cigarettes is going to go to schools, right? Or smoking cessation policies, but also and.
Barry Nailbuff
Lottery, the money from lotteries is going, right?
Mike Pesca
The money from lotteries goes to school. But I don't think lotteries are a syntax. I want to think about something that's a syntax, which is we want to A, stamp out the behavior, but B, maximize the revenue from the behavior for a social good. It is true that all economists will point out that those two Things are at odds, but they don't quite. I think they're a little more gentle than a lot of economists were when criticizing how it odds maximizing revenue and fostering negotiations were with the Trump tariff.
Barry Nailbuff
We're happy to have some amount of smoking and to the extent we have it, we're going to make some money on it. Same thing with alcohol. And you could say we want to have some amount of trade and we hope to make some tariff revenue on the amount of trade that we want to see persisting. I got that. But these tariffs were not designed to do that. They were designed to stop all trade and disrupt everything. And look, I get the idea of moving manufacturing back to the United States, but let's be clear. We're not going to be making T shirts in the United States and we're not going to be assembling iPhones in the United States. And it's going to take years to get manufacturing to come back. And so things like building chip factories. Okay, I get that. That makes sense. So you want to have a policy which encourages stability because people are making investments, they're going to go over multi years and you realize that not all components can be made at the same time. And so therefore the fact that you can import some of your ingredients, some of your components is also going to be critical to moving manufacturing back to the United States. A good negotiator has patience and I'm not sure that that's what we're seeing here.
Mike Pesca
Would you say that the proof positive, you don't even have to have subjectivity, the proof that this was a poor negotiation is that he had to back off it because huge market sell offs.
Barry Nailbuff
Well, again, if the objective is simply to get other nations to go to zero tariffs, I think he can achieve that. I think he did it in a way that was more costly than necessary. But nonetheless, if that's your final goal, we can declare victory on that.
Mike Pesca
Yeah, there is a, there is another component. There's a Z axis to this graph, which is the political component. So I don't know if there is an analog to when you're selling a house or, you know, pricing ingredients for iced tea, let's say. But Trump in a negotiation wants to get what he wants to get out of the negotiation, but he also wants to appeal to the public. So, yeah, so if saying something, so saying something maximally that could be damaging to your negotiation also is so thrilling to your base or somehow gets you elected, there might be reason, a logical reason to do that.
Barry Nailbuff
Exactly. So let let's look at the negotiation over who's going to pay for the walk. And he says Mexico's going to pay for the wall. The extreme position and the end result is the Mexican president cancels his trip to the United states and the US pays 100% for the wall. So his negotiation over how the wall's going to get paid for didn't work at all. But as a tactic to get elected, it was brilliant. And so absolutely, there's two audiences here, and the scale of how much we paid for the wall is irrelevant compared to him getting elected.
Mike Pesca
Right. But I would say that, that that's different. The wall rhetoric and whatever policy was attached to it is different from this in that, well, we all know the history of how he even injected that into his speeches. And he said it once at a rally and he didn't quite believe it and it got a huge reaction. And he's like doing a real time focus group. So it became one of the greatest hits that he'd have to say at a rally. And he probably, you're right, it did help him get elected. And he probably never had any kind of policy and attachment to it to begin with. With this, he wasn't so specific. He didn't have one line saying, and we're going to tariff everyone a baseline of 10% or we're going to tariff the herd in McDonald Islands with their penguins 10%. He could have come out with what you're talking about, a much more reasonable, rational tariff policy and still lived up to all the rhetorical commitments he made during the campaign and his whole life.
Barry Nailbuff
So this is the, the world has been beating us up, they've been treating us unfairly. And so we have to hit back, and we hit back hard. And the problem is most negotiation strategies are incredible. When you say this is going to hurt you more than it hurts me, well, okay, but it's hurting me, and so I don't want to do it. And Trump has been so far a master with his unpredictability of taking actions that hurt himself that you otherwise would think people find incredible to do.
Mike Pesca
Yeah. Also, you know, international trade is a win, win, should be a win win. I mean, we give you, he was talking the other day about how unfair it was that China, quote, made a trillion dollars in trade, but we got a trillion dollars in goods. So they didn't make a trillion dollars in trade. And in fact, the goods that we got had, we had to produce them would cost us more than a trillion dollars. But he does think that trade I guess he thinks that everything can't be win, win, and maybe in, I don't know, real estate. I don't even know if this is true. There are probably some zero sum negotiations. But I would think, but you tell me, you're the expert, that trade is very much the antithesis of that mindset.
Barry Nailbuff
Yeah. So look, I believe negotiation is ultimately a win win. That is, if you don't do a deal, both sides lose because there was something you were trying to create through the negotiation. And it's true that among the different deals, they win lose. But doing a deal, getting an agreement creates value that the two parties can share. Now, in terms of trade, I think it's been oversimplified, saying that it's all win, win, because in fact, the sum can be win. But there are clear losers that take place, whether it be the automakers, the union workers in Michigan, the Appalachia, you know, they were worse off. And we didn't take a policy to protect the folks who are going to be losing from trade. And so that's one of the reasons why many people have become anti trade.
Mike Pesca
Yes. And it might be net win, win, but that doesn't mean all the factors that go into the net on the domestic side, all of them win.
Barry Nailbuff
And let's be clear, people for a long time didn't understand where they were seeing the win. Think about how amazing a TV you can get now for $200 and zero TVs are made in the United States. And when suddenly people see the price of TVs going up to $1,000, they'll say, wait a second, timeout. I actually kind of like those cheap TVs, but they're not particularly good at doing the counterfactual of understanding what would happen without the trade, because they've never seen that. They see the negative things, but they don't know where the positive ones are coming from.
Mike Pesca
Stylistically, Trump always says that his predecessors were naive and allowed for all these bad trade deals to go through. So he has to come in with radical plans, big plans, plans that clearly cause pain, maybe even domestically, but certainly to our trading partners. How much truth do you think there is to that?
Barry Nailbuff
Well, in some cases, I would say the deals may not have been ideal. And look, he renegotiated NAFTA in a way that you could argue was a better result. But then, of course, he blows up his own agreement. And so he's critiquing his North America Canada deal and his Mexico deal. And people were relying on those deals in terms of the way they set up their manufacturing. So unless he's willing to criticize his own deals, you know, I, yeah, you can likely do better, but the question is at what cost of ripping up existing deals? And there are other ways of improving those deals without having to create the turmoil that we've seen.
Mike Pesca
Yeah. Trump always talks about the value of the madman strategy in foreign policy, and I've studied some of this, and I, I think he likes the term. I doubt he's has a real understanding what the madman strategy is. I think he thinks it's something like behave unpredictably and then people won't know what you're going to do next. So therefore, you have an intrinsic advantage. How much value is there? So you've done. I'm sure you know a lot about the madman strategy and Nixon, China. Does Trump do anything approaching that? Does Trump at least have right instincts about being a madman?
Barry Nailbuff
Look, on that level, as I said, it's very hard to take strategies where it cost you something, even if it costs other people more that it's like, well, wait a second, you know, was the scene in Blazing Saddles, you know, if you're not careful, I'm going to shoot myself in the head. And people don't believe you. When you have a strategy that you carry out, if it's going to cost you pain. Trump has demonstrated he's willing to do things that seem irrational, and therefore, that gives him a whole lot broader set of threats than you or I would be able to achieve, and they can be very effective. So, like I said, he's getting the world. He can get the world to zero tariffs on the United States quicker than anybody else could have. The only problem is I don't know if that's his objective, and that's this issue of his unpredictability, which is in negotiations. I want to give the other side what they want, not because I'm nice, but because if they get what they want, I can get what I want. And with Trump, it's not clear what it is to give him because I don't know what it is he wants.
Mike Pesca
Barry Nailbuff is the author of Split the Pie, A Radical New Way to Negotiate. He is a founder of the Justice Tea Company. He's a professor at the Yale School of Management. Thank you so much, Barry.
Barry Nailbuff
Thank you.
Mike Pesca
All right, there's more of Barry Nailbuff, which is great news. If you're a Pesca plus subscriber, we have an extended interview. Costs very little to subscribe. If you were A Yale Business School student would cause you tens of thousands of dollars. Plus you could try it out for a limited time only. I suggest you go to subscrib.mike pesca.com because in the remainder of this interview we're going to talk about things like the question is it hard to be allocentric and strong? Does that make you a little bit weaker? Barry has a very good answer to that. And also I mistakenly said, well, Harvard, Yale, these are a couple of the schools that could definitely, given the size of their endowment, withstand what Trump is trying to do in terms of defunding universities. But Barry makes a great and compelling case that it's quite the opposite. They're most susceptible to that. You could find out why. Go to subscribe mike pesca.com for ad free bonus material. And soon we'll be announcing a major initiative with the written word. Subscribe to Mike Pesca. And now the spiel. If you've heard anything about tariffs, and I'm going to assume you have, they nearly scuppered the US economy. So if you've heard anything, you may have come across a particular idiom used to describe the types of negotiations. They are said to be a massive game of chicken.
Barry Nailbuff
He's playing a game of chicken with no end.
Phil Morehouse
It's really a game of chicken where.
Mike Pesca
Each one is, you know, driving the.
Phil Morehouse
Car at the other one.
Mike Pesca
But over in the uk, and I did use the word scuppered before, there is a different kind of chicken concern. Hi, my name is Phil. I like to come out politics. And in this video I'd like to discuss how Trump seems to be misjudging a few things about his terrorist plan. He is suggesting that we will need to accept chlorinated chicken for lower tariffs, seemingly unaware of the massive political and public opposition to this. That gentleman was English, I can only assume. Picking up on context clues. He is Phil Morehouse, whose YouTube channel covering political news from a socialist perspective has a quarter million viewers. The background was Parliament. Big Ben might as well have been a picture of Shakespeare and David Beckham sharing a warm beer. Britain is all aflutter over the prospect of having to eat American chicken. American chlorinated chicken. It is a demand of impending trade deals. Supposedly that the UK lowers its barriers, which some in the UK say means lowers their standards. The callers to the British network LBC had a bone to pick with the policy.
Barry Nailbuff
Okay, we go to a swimming pool, we drink chlorine, sometimes once a week or once a month. But why the cold chlorinated chicken is because their standards are low.
Mike Pesca
They've got lots of lack of germs.
Barry Nailbuff
On the chicken, they don't look after.
Mike Pesca
The chicken as well and then they wash it with a chlorinated chicken to kill the germs. That was Jay from Saffron Walden talking to host Nick Ferrari. You picked up on the anxiety there. It's not the eating of the chlorinated chicken that is so wrong. It is the question of why do they, meaning we have to chlorinated in the first place. There's another angle beyond the supposed first and second order health concerns and that's nationalism, the purity of the nation. Here was the UK Labor Minister on lbc.
Barry Nailbuff
Would you be happy to see chlorinated chicken in the United Kingdom?
Mike Pesca
No, because the UK food standards are clear that they are not up for negotiation in any deal with other countries. And so chlorinated chicken hormone treated beef, both illegal in the UK and will remain so. James Murray there talking to once more, Nick Ferrari, a man who really couldn't look less like a Nick Ferrari. What's going on in the UK is very much like what's going on over here. Using all manner of appeal to sanctity, to purity, to patriotism to pursue essentially what is a trade policy. That second reference that you heard the minister talking about, hormones in meat or beef, that's a credible concern, scientists will tell you that. But including chicken in that danger is a really unfair conflation. And it's not just the chicken industry saying this though. It is the chicken industry saying this. I have been watching a lot of chicken industry videos narrated by a fellow put on this earth to narrate industrial films. Like many of our favorite foods, we often don't think about all the hard work that takes place before it reaches our plate. The US Poultry and Egg association invites you to join us for a behind the scenes look at today's high tech, highly efficient poultry processing plants. Those are good pipes. Now, I have to say I was slightly impressed with the fact in the middle of all these chicken videos that didn't totally skip over the part about killing a lot of chickens. They pass by a sharp blade that severs arteries in the neck and then after a cold, plunge and gutting. Sometimes, sometimes. The National Chicken Council estimates that chlorine is used in less than 5% of processing plants. But sometimes this happens. Other strategies may include the use of food grade antimicrobial rinses, which are recognized by the U.S. food and Drug Administration as a safe and effective way to inhibit the growth of foodborne pathogens on raw product. Ian Boyd, a professor of biology at the University of St. Andrews, told the New York Times, quote, this is a classic example of how belief has overtaken evidence and become embedded in a complex sociopolitical discourse which is almost certainly motivated by something very different from the actual issue. Yes, that is exactly what I was picking up the caller from Saffron Walden as saying. But the professor from St Andrews went on say chlorine washed chicken is almost certainly a proxy for much deeper issues concerning trust. So you might be thinking, oh yeah, they don't trust Donald Trump. No, that quote was taken from a New York Times article in 2021. The Biden administration then was forced to negotiate with the UK after Brexit. A fractious Britain united in hatred, not particularly scientifically sound hatred of US chicken. It was apparently one of the few things bringing the country together. The same phenomenon is being seen now. You would not believe how big an issue this is in the uk. Their tabloids are going crazy with chicken stories. Crying foul, beating their breasts, clucking their disapproval, running around like chickens with their heads cut off. The fact that there are a lot of chicken puns available does not hurt tabloid coverage. But perhaps the tabloids, like the chicken plants they criticize, are unfair abattoirs on this question, maybe they are. I just wanted to give you a pun slightly elevated from British tabloid level. No page three girls here, though the Europeans themselves have studied the issue and the European Food Safety Authority could find no evidence that chlorinated chicken is unsafe. As far as the Ah, but it doesn't cover up for the sins of the chicken creation process. Well, that is a claim, when you break it down, that the chicken chlorine wash is ineffective. But there's no evidence for that either. And plenty of U S Chicken makers have, as noted, moved away from chlorine and towards parasitic acid, which probably doesn't have the cultural cache of chlorine in that parasitic acid isn't used as a chemical weapon sometimes. Tabloids and gizzards aside, it seems as though UK Prime Minister Keir Starmer is smart enough to avoid this issue. Overall, chlorinated chicken won't be on the table in trade negotiations or in London. Sidestepping the chicken talk doesn't make him cowardly, it makes him smart. He'll insist on avoiding this issue and the US will almost definitely accept a deal that allows for 95% of the chicken, the percent that isn't chlorinated, to go over to the UK. It's kind of an obvious solution. It might not fit in with the interest of tabloids or the anxieties of Englishmen, but unlike a chlorinated chicken, it is sure to take flight. That's it for today's show. Just is produced by Corey Wara and cbso Michelle Pasco umpru G Peru duparu and thanks for listening.
Podcast Summary: The Gist – "Trump’s Trade Tactics: Betwixt Chaos and Coherence"
Release Date: April 14, 2025
Host: Mike Pesca
Guest: Barry Nailbuff, Yale School of Management Professor
In this episode of The Gist, Mike Pesca delves into the complex landscape of former President Donald Trump's trade policies, particularly focusing on his use of tariffs as a negotiation tool. Joining him is Barry Nailbuff, a distinguished professor from Yale School of Management and author on negotiation strategies, who provides expert analysis on Trump's tactics.
The episode opens with Pesca discussing the immediate aftermath of Trump's recent tariff announcements. Trump has retracted tariffs beyond 10% with all trade partners except China, maintaining soft tariffs on critical imports like smartphones and electronics.
Pesca [04:07]: "Howard Lutnick, the Commerce secretary is to tariffs, but director Russ Meyer was to bosoms in generally very pro, but even more favorable the bigger they are."
Despite initial optimism, the markets have responded negatively, signaling investor concerns about a potential recession stemming from these tariff policies.
Barry Nailbuff provides insight into Trump's negotiation style, characterized by extreme anchoring. He explains how Trump often sets lofty tariff rates as a starting point to sway negotiations.
Nailbuff [10:58]: "Trump believes that you should start off with an extreme anchor, just something that's way away from where you end up."
However, Nailbuff cautions that such extreme positions can backfire, forcing Trump to make significant concessions that may undermine his negotiating stance.
The discussion shifts to the underlying objectives of Trump's tariff strategies. Possibilities include:
Nailbuff [13:46]: "If your goal is to get zero tariffs from the other countries, actually his approach could be very effective for that."
Nailbuff notes that while Trump's tactics may achieve the desired reduction in tariffs, they do so at a higher economic cost than necessary.
Pesca highlights the political maneuvering intertwined with Trump's trade policies. Trump's rhetoric often appeals to his base by portraying his actions as strong and decisive, even when they may jeopardize economic stability.
Nailbuff [20:38]: "There's two audiences here, and the scale of how much we paid for the wall is irrelevant compared to him getting elected."
This dual audience approach allows Trump to maintain political support while engaging in potentially damaging economic policies.
A significant portion of the conversation focuses on the analogy between tariffs and the Laffer Curve, which illustrates the relationship between tax rates and tax revenue. Nailbuff explains that excessively high tariffs can lead to a decrease in trade volume, thereby nullifying potential revenue gains.
Nailbuff [15:08]: "If you raise tariffs so high that nobody sends things to the United States, well then, you're getting a high rate on zero volume and again, you make no money."
This insight underscores the inefficacy of using tariffs solely as a revenue-generating tool when set beyond optimal levels.
Nailbuff advocates for the concept of win-win negotiations, where both parties benefit from the agreement. However, he acknowledges that Trump's approach often treats trade as a zero-sum game, disregarding the mutual benefits that can be achieved.
Nailbuff [23:28]: "I believe negotiation is ultimately a win-win. That is, if you don't do a deal, both sides lose because there was something you were trying to create through the negotiation."
He critiques Trump's tendency to overlook the broader advantages of cooperative trade agreements in favor of unilateral gains.
Towards the end of the episode, Pesca and Nailbuff examine a specific tariff-related dispute involving chlorinated chicken imports from the UK. The UK has raised concerns about the safety and standards of American chicken, leading to public outcry and political backlash.
Nailbuff [31:25]: "Chlorinated chicken is because their standards are low."
This case study serves to illustrate the complexities and public sentiments that can influence trade negotiations beyond economic metrics.
In wrapping up, Pesca synthesizes the conversation by highlighting the tension between Trump's aggressive tariff strategies and their broader economic and political repercussions. With expert analysis from Barry Nailbuff, the episode provides a nuanced understanding of how Trump's trade tactics oscillate between chaos and coherence, impacting both international relations and domestic economic stability.
Notable Quotes:
Pesca [10:58]: "Trump believes that you should start off with an extreme anchor, just something that's way away from where you end up."
Nailbuff [15:08]: "If you raise tariffs so high that nobody sends things to the United States, well then, you're getting a high rate on zero volume and again, you make no money."
Nailbuff [23:28]: "I believe negotiation is ultimately a win-win. That is, if you don't do a deal, both sides lose because there was something you were trying to create through the negotiation."
This comprehensive analysis offers listeners a deep dive into the strategic maneuvers of Trump's trade policies, the economic theories underpinning them, and their multifaceted implications on both international diplomacy and domestic politics.