There’s a lot of noise right now about the damage Trump’s proposed 25% tariffs could cause. The debate centres on rising consumer costs, economic retaliation and potential trade war escalations. But, in my view, we should be asking a different question;

.... Why is this happening?

... What is the underlying negotiation strategy at play?

The “Why Behind the What”

In his first term, Trump’s tax cuts were positioned as an economic stimulant—reducing corporate and individual tax burdens to inject more money into the U.S. economy. However, this time, it’s an extension rather than a fresh initiative. That means he now needs to justify how it gets paid for.

Here’s where the tariffs come in. Based on available data, a 25% tariff on key imports could generate upwards of $350 billion per year. Extending his tax cuts, on the other hand, is projected to cost around $4.6 trillion over a decade. It’s not a perfect match, but it creates a negotiating position—one that allows Trump to argue that the revenue from tariffs offsets the cost of extending tax reductions.

The Art of Financial Positioning

From a negotiation perspective, Trump is leveraging a well-known tactic: justifying a high-cost concession by introducing a revenue stream that makes it appear budget-neutral. It’s a way to frame the discussion in a way that aligns with broader economic goals. While many see tariffs purely as an economic weapon, they may actually be a strategic bargaining chip for a much larger policy move.

Interestingly, this approach mirrors corporate negotiation strategies. Businesses often justify price increases by tying them to reinvestment in quality, sustainability, or service improvements. Governments use similar logic... raising taxes in one area to fund reductions elsewhere.

The Negotiation Takeaway

What’s the lesson here? In negotiations, it’s easy to get stuck reacting to the surface-level move (in this case, tariffs). But skilled negotiators step back, look at the bigger picture and ask:

• What’s the actual objective behind this proposal?
• How does this move fit into a broader strategy?
• What alternative paths might exist to reach the same goal?

For those negotiating in business, procurement, or politics, the ability to think beyond the obvious and connect seemingly unrelated dots is a critical skill. Whether or not the tariff strategy is sound, it’s a reminder that great negotiators don’t just look at the move in front of them.... they anticipate the moves behind them!

Negotiation Tactics for Unclear Objectives

So how do we negotiate when the other party’s true objectives aren’t immediately clear? Here are some key tactics to use in these situations:

1. Open-Ended Questions – Asking broad questions like "What are your priorities?" or "How do you see this playing out in the long term?" can reveal underlying motivations.
2. Mirroring and Summarising – Repeating key points and summarising what the other party says encourages them to clarify their position further, often revealing hidden objectives.
3. Testing Assumptions – Instead of assuming their position, propose a scenario: "If we adjusted X, would that help with your goals?" This helps surface their priorities without confrontation.
4. Identifying Trade-Offs – If they are reluctant to share their true objectives, offering a trade-off can prompt them to reveal what they value most.
5. Observational Listening – Pay attention not just to what is said, but how it is said. Hesitations, pauses, and tone shifts can indicate discomfort or areas where they are not being fully transparent.
6. The “If You, Then We” Technique – Proposing conditional agreements forces the other party to commit or clarify their true priorities. For example: "If we agree on this price, then would you commit to a longer-term contract?"
7. Creating Alternative Paths – Sometimes, providing multiple options forces the other side to indicate which one is closer to their real goal, revealing their hand.

What This Could Mean To Tariff Negotiations?

So consider this.... If the true reason behind these tariffs is to argue revenue generation solely for the short-term objective of extending tax cuts, then any attempts to negotiate their removal are unlikely to succeed... at least in the immediate future.

The tariffs serve as a financial justification for a politically significant tax policy, making them a critical bargaining tool rather than a flexible trade measure. Those seeking to negotiate their avoidance may find little leverage, as their removal would undermine the very argument for fiscal balance. However, should Trump achieve his tax extension and the economic strain of inflation become too great, he may then have the political room to reduce or remove the tariffs... once their primary purpose has been fulfilled?

Negotiation isn’t always about arguing over surface-level demands. The best negotiators dig deeper, identifying what’s really at stake and shaping discussions accordingly. The next time you find yourself in a situation where the other party’s goals aren’t clear, try these techniques to uncover their true interests.

REMEMBER... We may be completely wrong but that doesn't stop us practicing asking... 

"Not what they say... but why they say it!"