Art of the deal?

At least a dozen countries are said to be at the table negotiating their trade situation with the United States.

So the staple first move for Trump in any negotiation is to ask for the moon in hopes of settling for something more realistic. One has to wonder if this is all just a negotiating tactic. After all, these tariffs are in the same vicinity as the moon.

Certainly, it is possible that Trump really does want to push these sorts of tariffs. After all, they would apparently bring in approximately three quarters of a trillion dollars annually (they are a tax after all). Perhaps he really believes that this could be a way to cut our deficit, at least in the short term, as well as fund the extension of his first term tax cuts.

On the flip side, he has hinted that he is willing to negotiate with countries in order to find a better agreement for both sides. As of this morning there is a long list of countries on board to be at this table. I suspect this list will grow.

Now as much as we hear all of the bravado from pretty much everyone, with everyone "swinging it around", at the end of the day none of that changes the reality. The United States is responsible for over a quarter of the worlds GDP, and it owns nearly 30% of the worlds' wealth. The average American has more than 1.5 times the disposable income as the rest of the first world does, meaning US citizens are largely the ones buying many products that are not considered necessity.

The reality is that we don't need others to buy from us nearly as much as others need the US to buy from them. Anything that dampens their ability to export their products to the United States is going to be crushing as there is no other demand quite like our demand. It's the greatest demand. Tremendous demand. Beautiful demand. Everyone says it... but I digress.

The question many of these world leaders are having to ask themselves right now is simple. Do they want to bend the knee and negotiate with the bad orange tyrant, or do they want to escalate a trade war which may bring about a global recession that will likely harm them much more than it would harm the United States? Many people want their leaders to stand up to Trump but will certainly blame those same leaders if they lose their job or run into other economic issues.

So the bottom line is whether or not Trump wants to make a deal or actually wants the tariffs. I suspect that he would prefer the former over the latter but would likely accept the latter if need be. This puts him into a better negotiating position than pretty much everyone else (who all want a deal and want nothing to do with these tariffs).