How to Negotiate with Trump: A Playbook

Negotiating with Donald Trump has always been a high-stakes game. His approach to diplomacy and trade negotiations follows a pattern that can be conceptualized using game theory. If you find yourself across the table from him - whether in politics, business, or international trade - understanding the strategic dynamics at play is crucial. By recognizing his strategies, anyone from CEOs to politicians can learn how to handle a tough, aggressive negotiator without being steamrolled.

The Power of (Extreme) Focal Points and Commitment

One of Trump’s most defining negotiation strategies is his ability to make extreme requests, thereby setting extreme focal points (e.g., buying Greenland, increasing NATO spending to 5%) - positions so bold and beyond belief that they immediately shift the reference point of the discussion. He starts with an extreme demand that his opponents would never consider acceptable, thereby anchoring the conversation at an entirely new level.

Example: NATO Spending Demands

During his first term, Trump pressured NATO allies to immediately increase defense spending to 2% of GDP - then raised his demand to 5% before taking office again in January 2024. He also suggested that allies should pay back their "debt" from the past, even though no such rule exists. His public threats, including the possibility of NATO withdrawal, pushed European leaders into defensive negotiations. While they didn’t fully meet his demands, many countries increased their defense budgets - both to appease him and to strengthen their own security.

How to Counter It:

• Avoid outright confrontation - it only fuels the conflict
• Introduce alternatives that let him shift course without appearing to back down.
• Let him save face while adjusting positions behind the scenes.
• Allow him to declare victory even if actual concessions are minimal.
• Stay unemotional - even in highly heated environments.

The Power of Appearing Irrational

Trump’s playbook often includes moves that seem irrational - even self-destructive. The game theory concept of the "madman theory" suggests that by appearing unpredictable, he forces his opponents to fear that he is "crazy" enough to follow through with actions, even if they would be damaging to the U.S. and himself.

What makes this particularly powerful is that he does not just make irrational threats - he commits to them. This makes it difficult for opponents to assume he is bluffing. Even when economic logic, expert opinions, and market reactions suggest that his moves will backfire, his firm commitment makes it risky to call his bluff.

Example: 25% Tariff on Mexican Imports

Trump announced a 25% tariff on all imports from Mexico into the U.S., shaking global markets. Experts agreed it would harm the U.S. economy, raise consumer prices, and provoke retaliation. The stock market plunged, reflecting fears of economic damage.

Yet, Trump doubled down, making it unclear whether he would actually back off. This forced businesses and governments into a defensive position, considering concessions on border protection and immigration just to prevent the tariffs.

How to Counter It:

• Don’t assume he’s bluffing - he commits to threats, making them hard to ignore.
• Offer off-ramps - symbolic wins that let him walk away victorious.
• Be patient - markets, advisors, and voters may pressure him to change course.
• Plan for the worst - assume he might actually follow through and prepare accordingly.

The Much Needed "Victory Moment"

A crucial component of negotiating with a Trump-style negotiator is recognizing that winning isn’t just about substance - it’s also about optics. Trump often seeks opportunities to claim a personal victory, even when actual policy concessions are minimal. This means that allowing him to publicly declare success can be an effective strategy for de-escalation (also worth listen to Matthias Schranner in the latest episode of the Game Changer podcast).

Example: 2020 U.S.-Mexico Trade Deal

During the NAFTA renegotiations, Trump called the agreement a disaster and demanded an overhaul. The final deal, USMCA, was not dramatically different, but by rebranding it, Trump claimed a huge win and ended the negotiation.

How to Counter It:

• Offer symbolic wins that allow him to claim success without significant compromise.
• Frame agreements to give him a "victory moment" - he values optics over details.
• Recognize that optics matter - if a deal can be spun as a win, he’s more likely to accept it.
• Don’t force him to admit defeat - this will only escalate the conflict.

Negotiating with a Trump-Style Negotiator

Negotiating with someone like Trump isn’t about playing nice like we prefer especially in our Western cultures - it’s about playing smart. His strategies, while unconventional, are based on principles that can be countered with the right approach. Whether you are in business, politics, or any high-stakes negotiation, understanding these tactics gives you the upper hand.

Trump doesn’t play by the usual rules, so you shouldn’t either. If you recognize the game, you can play it better - and come out ahead.

Key Takeaways:

? Expect the extreme – Be ready for bold, shocking demands. Don’t be rattled.

? Distinguish bluff from commitment – Identify which threats are real commitments.

? Use small concessions wisely – Offering minor wins can defuse tension.

? Let him declare victory – Most negotiations end when he can claim a win, regardless of actual outcomes.

? Stay cool under pressure – His tactics often provoke emotional reactions. Staying calm keeps you in control.

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