Trump’s business mindset collides with political reality

Let’s start with the fact that the success of Trump’s economic diplomacy is not based on his brilliant skills as a negotiator. It is solely because he is the president of the strongest economic and military power. Thanks to the status of leading a powerful country, he can negotiate from a position of strength, which obviously gives him clear advantages in such talks.

He doesn’t even try to persuade the other side or show them what benefits they might gain. Instead, through threats and ultimatums, he demands that the other side accept his proposal.

Moreover, in all his negotiations, he doesn’t even hide that the conditions he demands benefit only himself. At the same time, these conditions may be completely unfavorable to the other side, and he openly shows that he doesn’t care about their interests.

Considering that most of his opponents are in a weaker position and often dependent on the U.S., all they can do is accept Trump’s terms. Although it is worth noting that they often manage to negotiate better conditions than Trump initially offered.

The negotiation style itself is also problematic. Along with it grows the resentment toward U.S. diplomacy, which in turn pushes away natural allies, relationships with whom previous administrations had carefully built.

This type of diplomacy has several significant drawbacks. Trump emphasizes prioritizing commercial benefits over political ones. Previously, the U.S. supported certain countries for political reasons without gaining any economic profit from them. The basis for such support was ideological opposition to the Soviet Union. To prevent some countries from falling under Soviet influence, the U.S. had to support certain countries or political movements, spending huge amounts of money without receiving any commercial benefit, at least in the short term.

One can recall the Marshall Plan. Support for Europeans could still be justified by long-term economic feasibility, but support for Asian countries like South Korea or Taiwan had no commercial rationale. At the time U.S. support began, each of these countries was economically underdeveloped and resource-poor, unable to provide any commercial benefit to its powerful ally.

The Americans used to call Korea a “rat hole” because after the Korean War, it became the largest recipient of U.S. financial aid, but this aid simply disappeared into the pockets of corrupt officials and brought no real benefit to the country itself. Only decades later did these countries reach such a level of economic development that now makes them strategic commercial allies of the U.S.

Similarly with Israel. The U.S. began supporting this country solely for political reasons. Unlike the Muslim countries of the Middle East, which were rich in oil and could actually offer the U.S. the resources it needed in the ’70s, Israel could not offer anything to the U.S.

And the most recent example of such support is Ukraine. Let’s be honest — after the collapse of the Soviet Union, the U.S. paid significantly more attention to the country than could be explained by any commercial interests.

This is explained by the fact that the U.S. did not want to allow the restoration of the USSR. Zbigniew Brzezinski wrote in his book The Grand Chessboard that Ukraine is a crucial territory for Russia, necessary for restoring its power.

Of course, I’m not claiming this system was perfect, but it worked. Now Trump is trying to break it by putting commercial interests above political ones. To be a U.S. ally now, a country must be commercially profitable, and any support must be based on business transactions — buy and sell.

At the same time, Trump doesn’t understand the political consequences of this approach. Not every country can afford to pay for U.S. services, as in Ukraine's case. Yes, it currently has money, but only because European partners financially support it. Without this aid, it has no financial resources to buy the necessary American weapons. This, in turn, could allow Russia to achieve its goals. And then Russia, strengthened by Ukrainian territories, resources, and population, could become a threat to the U.S. itself.

This topic reminds me of Kissinger’s book Diplomacy, where he describes how the British in all European continental wars constantly supported the weaker opponent. This was done solely to prevent the stronger opponent, by defeating the weaker one, from becoming powerful enough to challenge Britain itself. This is how the “balance of power” system works, but Trump probably hasn’t heard of it.

The second point is that such an indiscriminate approach will lead to very questionable alliances. Other countries will see Trump’s indiscriminate signing of such deals and, for their own long-term benefit, will agree to them. However, the problem with these deals is that they do not resolve the causes or political disagreements between the states.

It immediately brings to mind how the Third Reich had commercial relations with the Soviet Union. The Germans needed resources abundant in the USSR, while they sold industrial equipment the USSR required. Yet these commercial ties did not eliminate the deep political conflicts between the countries. Each secretly viewed the other as a rival, waiting for the right moment to destroy them. Similarly, during the Iran-Iraq War, the U.S. supported Saddam Hussein, but Hussein saw this support merely as a way to strengthen his own power.

As Hussein’s example shows, political support also carries similar risks. However, political support’s risks are lower because there is selectivity in choosing allies. Commercial support lacks such selectivity — there, interests are driven solely by money, and it’s profitable to work with whoever has more of it.

The third drawback of this commercial bias is that Trump views deals only from the perspective of benefits to the U.S., without offering any advantages to the other side. Although countries wanting to please Trump try to find benefits for themselves, this does not solve the core problem, especially given that China is simultaneously advancing its own economic diplomacy.

China’s strategy in Africa is very telling. China provides African countries with loans, builds infrastructure, and helps develop basic industries. Of course, China acts in its own interests, but this also benefits the African countries themselves. This way, China strengthens its influence in the region, where the West has never had a strong presence. Naturally, China’s economic diplomacy will be more successful than the commercial diplomacy of the U.S.

The last drawback of commercial gain is the questionable benefit for the U.S. itself. Trump signs many deals, but how will they help restore the U.S.’s lost positions in certain sectors? How will they help overcome China? They won’t, because these challenges are not solved by the type of deals Trump is signing now. They are resolved through long-term economic policy. Only within such a policy can deals be signed, and then they will have a completely different format than now.

Therefore, I personally believe that Trump’s obsession with signing deals is just a nice image for his voters but will bring no long-term benefit to the U.S. itself.

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About the author. Pavlo Vernivskyi, economist, expert at the Oleksandr Pol Institute.

The editorial team does not always share the opinions expressed by blog or column authors.