Trump is bluffing
By Kim Tae-gyu
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In poker, the best hand tends to win. But the problem is that players do not know who has the best hand. Sometimes, an inferior hand successfully bluffs, or pretends to be the best hand, to make scared opponents fold and the bluffer wins the pot.
Bluffing is usually considered a poker term, but similar tactics can be applied to other strategic games, and even to our daily life like negotiations. The punch line is how to deceive or threaten other players to make concessions or fold.
United States President Donald Trump, who regards many things as a negotiation and respects tough negotiators, seems to have adopted the bluffing strategy quite often throughout his life. In his book “Great Again,” he gives a glimpse to his bluffing style by saying, “Sometimes it pays to be a little wild.”
That also appears to be the case in a possible renegotiation of the Korea-U.S. free trade agreement (KORUS-FTA).
Denouncing the five-year-old pact as a “disaster” and a “job-killing” deal, Trump is expected to overtly request soon that the two sides should start renegotiations. His top lieutenants also take issue with the widening trading deficit in the U.S. over the past five years.
Does Trump really believe that the KORUS-FTA is lopsided in favor of Korea? I don’t think so. I guess that he is bluffing once again because he knows that the trade agreement has been beneficial to both sides.
A 2016 report by the International Trade Commission (ITC) noted that the KORUS-FTA increased U.S. exports by $4.8 billion and improved its trade account by $15.7 billion. The U.S. agency also estimated that the U.S. trade deficit with Korea would have jumped to $44 billion from $28.3 billion without the pact.
The Ministry of Trade, Industry and Energy of Korea recently said that the country’s investments in the U.S. stood at almost $37 billion from 2012 to 2016, up 60 percent compared to 2007 to 2011. Last year, the amount hit a record high of $12.9 billion. This compares to $7.9 billion in U.S. investments in Korea during the past five years.
Unlike the merchandise sector, the U.S. has always savored a trade surplus in services with Korea and the size jumped to a historic high last year.
And what about Korea’s imports of U.S. weapons, which amounted to around $5 billion a year on average through last year from some $600 million in 2011? The Terminal High Altitude Area Defense (THAAD) battery is no different. The U.S. would eventually put heavy price tags on the controversial anti-missile system, which is being installed here.
If Trump is bluffing, or trying to get something by threatening to walk off from the free trade deal, the above-mentioned figures would not matter to him. What would really matter to him is how to get concessions from us through his time-honored strategy.
If we sweat, he would smell blood, and we are dead. If we hold our ground and stand up tall, he will back off.
It is fine for Trump to play this game because many expected that the persona non grata would do it but I strongly recommend Trump-the-bluffer to remember that the timing cannot be worse.
The U.S. talks about renegotiations of the KORUS-FTA at a time when Korea is struggling due to economic retaliation from China due to our decision to install the THAAD battery here.
Korea has tried to have a balance between the two superpowers of the U.S. and China. But it opted to tilt toward the U.S. in terms of its security by adopting the U.S. anti-missile system despite strong protests from China.
Given its consistent objection to the THAAD system, which China worries can also monitor airborne objects in its territory, the country’s retaliatory measures are technically understandable, if not acceptable.
But rages boil with regard to the U.S. as many think that Washington is trying to exploit Korea just after deploying the THAAD system instead of helping its long-time ally, which might prompt anti-U.S. sentiment among young Koreans.
Aged Koreans who remember the active U.S. roles in the Korean War (1950-53) and Korea’s post-war reconstruction see the world’s largest economy with great respect that borders on awe.
They would not be swayed by the claims that the U.S. president is trying to take advantage of us. But young people are different as they are not big fans of Uncle Sam. They could be greatly affected by such arguments.
In his other book “The Art of The Deal,” which he half-jokingly contends is the world’s second best book after the Bible, Trump talks about his bluffing style.
“I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after. Sometimes I settle for less than I sought, but in most cases I still end up with what I want.”
In the same book, he also says “When your allies don’t trust you … you have zero credibility in the world.”