The Law of Unintended Consequence

The author giving a lecture to international business and Chinese culture students at North Central College in Naperville, Illinois..

Be careful what you wish for. It may come true. That’s a sage bit of conventional wisdom that is a variant of the Law of Unintended Consequence. You may get what you want, but it may come with baggage.

Americans have long debated whether or not a businessperson or a career politician would make the best president. However you come down on that question we are in the process of finding out.

Even beyond his flamboyant style, his hyper rhetoric, and his proclivity to Tweet whatever he is thinking at the moment, it would be hard to find a past American president with less political experience than Donald Trump. Even retired military generals who have gone on to the highest political office in America had to negotiate the ladder of ascension in a large and politically competitive institution.

As have most CEOs of most large public companies. Donald Trump, however, spent most of his career at the top of a family business with his name over the door. He had to negotiate some pretty big deals, and that always involves a little bit of political maneuvering, but he has never had to compete for the corner office with his political enemies.

While many Americans have already made up their mind, only time will tell if President Trump makes a good president or goes down in the annals of infamy. I offer no predictions here. This is a blog about China.

One thing we should have learned in the nascent days of Trump’s presidency, however, is that negotiating a business deal and negotiating a diplomatic deal are not one and the same. And it has to do with the Law of Unintended Consequence.

In negotiating a business deal the negotiators often posture to the same extent politicians do. But the language is often different. The volume is different. And the trade-offs are different. The desired objective is generally obvious in the business deal and there are often trade-offs negotiated under the umbrella of the overall agreement.

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And that appears to be how President Trump and his team plan to negotiate with China. Taiwan, trade, and the South China Sea are just components of one big overall deal defining the relationship of the world’s two largest economies. As Trump would say, “Everything is in play,” just as it would be if he were negotiating the merger of two corporations.

But that is not how diplomacy works much of the time. And the result is that President Trump’s very public negotiation is working very much in favor of the Chinese. They are, I suspect, in no way disappointed by the current state of affairs although, given the extensive political experience that the current Chinese administration has, they will never acknowledge that publicly.

President Trump’s harsh rhetoric on China, of course, has not gone unnoticed in the rest of Southeast Asia. Contrary to pushing China’s neighbors into the protective skirt of the US, however, that rhetoric, and the geo-political risk it suggests, may be pushing China’s neighbors further away from both China and the US, a result that will ultimately favor China and its desire to assume greater leadership in the region.

Dr. Samir Tata, a former intelligence analyst and founder of the International Political Risk Analytics, recently wrote an insightful piece for Forbes Opinion. In it he argued that President Trump’s current rhetoric, along with the US’ unilateral withdrawal from the Trans-Pacific Partnership (TPP), as well as the Obama administration’s lack of interest in supporting the Asian Infrastructure Investment Bank (AIIB) sponsored by Beijing, will likely push key member countries of the Association of South East Nations (ASEAN) toward an official policy of neutrality along the lines of Finland, Sweden, or Switzerland.

In the event of armed conflict between the two superpowers, were such neutrality come to pass, the US could be seriously thwarted in its ability to exert military strength in the region. (Nations which are officially neutral would presumably not allow any foreign military presence on their soil.)

According to Dr. Tata, China is pursuing a much more holistic strategy of trade and investment throughout the region, “having displaced both the United States and Japan as the most important trading partners of the ASEAN countries.” To what extent this strategy will undermine existing security agreements in the region is unknown.

In business, however, while risk is to be avoided, uncertainty can often be employed to your benefit, particularly in a business negotiation. In the world of diplomacy, however, uncertainty is risk. And the harsh rhetoric of the “America First” doctrine is sure to put doubts in the minds of many foreign leaders considering who to dance with.

And that may ultimately prove to be the Achilles Heel of treating diplomacy like a business.

Contact: You may reach the author at understandingchina@yahoo.com. Mr. Moreau is also available for public speaking and the provision of third-party written content on a wide variety of topics for your website or other communications material.