Confidence in Negotiation: The Unexpected Role of Trump Tariff Formulas
Apr 04, 2025
When we negotiate, we’re not just trying to reach agreement — we’re trying to reach confidence. Confidence that the other party will stand by the deal. Confidence that there’s a solid process behind the decisions. And confidence that, even under pressure, we’re working with a shared understanding rather than blind guesswork.
This week, the U.S. government announced a new set of reciprocal trade tariffs — and crucially, they’ve published the formula used to calculate them. That transparency matters.
The Trump Tariff Calculation Formula:
Reciprocal Tariff (%) = (Trade Deficit ÷ Total Imports) ÷ 2
(Minimum tariff: 10% even if there is no trade deficit)
For example, if the U.S. imports £200 billion from a country but only exports £100 billion back:
(100 ÷ 200) ÷ 2 = 25% reciprocal tariff
Simple, right?
But here’s the negotiation question:
Does knowing the formula make things easier or harder?
EASIER ... because:
- Businesses now have a predictable reference point. They can model scenarios and prepare counter-proposals.
- It gives negotiators a starting point, not just a political decision.
- It removes ambiguity, which often causes negotiation paralysis.
HARDER... because:
- Perceived fairness ≠ actual fairness. Just because a formula exists doesn’t mean it reflects the complexity of global trade.
- It might create a false sense of finality. If negotiators treat the formula as immovable, it risks stifling creativity.
Even simple maths can lead to complex impacts: pricing changes, disrupted supply chains, retaliatory measures.
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So, what now?
For businesses across the globe, the challenge is clear: you must now negotiate, mitigate, negate, or navigate these changes.
And for us in negotiation practice, this is the perfect time to rehearse:
- Responding to rigid formulas
- Reframing fairness
- Proposing alternatives backed by insight, not just emotion
This isn’t just about Trumps tariffs ... it’s about how we deal with decisions that appear fixed, but might not be.
Would you be ready to negotiate a deal under these terms?
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You can’t negotiate with Washington, but you’ll still need to negotiate because of Washington.
Now the U.S. announced their new reciprocal tariffs, most businesses won’t be able to influence them at source... but they will be forced to deal with the consequences.
These tariffs will form the backbone of many price renegotiations. Suppliers will reference them. Buyers will challenge them. Internal stakeholders will demand justification. And you’ll be expected to handle it all with confidence and credibility.
So how do you prepare?
It’s not just about knowing the market — it’s about being able to navigate the conversation.
That’s where negotiation practice comes in. Especially around the fundamentals.
The tactics to start rehearsing now:
- Open Questions – not just any question, but the right open question, at the right moment, to the right person.
- Reframing – using answers from those open questions to shift the discussion away from blame and towards solutions.
- Fairness framing – carefully using language like “what feels fair?” to encourage collaboration instead of conflict.
- Summarising and Parking – to keep momentum, clarify understanding, and manage the emotional tempo of the conversation.
That’s why we practise the basics.
That’s why negotiation clubs exist.
...and that’s why those who train will have an advantage.
