No. of Recommendations: 6
"In April the projected tariffs were 28% on a weighted average and now at 17 weighted average and probably lower in the future. So I think the pundits you are criticising were looking at 28% and Trump was predicting higher.
The Administration recognized that the pundits may be correct and lowered the tariffs which are probably going lower. I don't see the substance of your criticism...."
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It’s a fair and logical observation to point out that the numbers changed—moving from a projected 28% weighted average in April to a realized 17% by December. That perspective suggests the “experts” and non-experts were simply reacting to the data they were given.
But he's an alternative perspective — one that suggests that many observers may have allowed their strong personal (and perhaps emotional) reactions to the "messenger" to obscure the strategic intuition of the message. By viewing these events through the lens of the principles found in "The Art of the Deal" (a book I previously suggested board members (re)read earlier this year), we see a pattern that is perhaps more intentional than accidental.
1. The Power of the "High Anchor"
One of the core tenets in The Art of the Deal is to "Aim High." Trump writes about the necessity of starting with an aggressive position to move the "center" of the negotiation in your favor.
• The Tactic: By starting at 28%, the administration set a psychological "anchor."
• The Result: When the rate eventually settled at 17%, it was viewed by trading partners and markets as a "relief" or a "compromise."
• The Punditry Error: Experts treated the 28% as a static, literal decree. Second-order thinking would suggest that the 28% was never the destination—it was the leverage used to ensure the 17% (or lower) was accepted without the massive retaliation many feared.
2. The Gap in "Second-Order Thinking"
First-order thinking looks at a 28% tariff and concludes: "This will raise costs and ruin investment." Second-order thinking asks: "What is the reaction to this move, and where does it lead the negotiation three months from now?"
The critics in April focused almost exclusively on the immediate math of the 28% figure. They failed to account for the negotiation lifecycle:
1. The Shock: An aggressive opening to freeze the status quo.
2. The Leverage: Using that shock to bring partners to the table who previously refused to budge.
3. The Settlement: Lowering the figure in exchange for concessions (reshoring, trade parity, etc.).
By the time the tariffs reached 17%, the "ruin" predicted at 28% never materialized because the high starting point had already forced the structural changes the administration wanted.
3. Negotiator vs. Bureaucrat
The fundamental disagreement between the pundits and the administration was a clash of worldviews.
• The Pundit View: Policy is a series of white papers and fixed projections. If you say 28%, you mean 28%.
• The Negotiator View: Policy is a fluid process of "the ask" and "the get."
As outlined in The Art of the Deal, Trump views the world as a series of deals. In this framework, overstating your position is not a mistake; it is a requirement. Pundits characterized the lowering of the rates as the administration "recognizing they were wrong," whereas a student of negotiation would see it as the administration "closing the deal."
Summary: The "Substance" of the Criticism
The core of the criticism against the pundits isn't that their math was wrong at 28% — it’s that their context was wrong. They analyzed a world-class negotiator as if he were a predictable bureaucrat. They mistook the "opening bid" for the "final price," and in doing so, they missed the underlying strength of an economy that could withstand the volatility of the negotiation process itself. The investment climate didn't "ruin" because the markets eventually realized that the high numbers were a means to an end, not the end itself.
