The North Korea Summit Isn't a Real-Estate Deal

The negotiating tactics the president learned in his private-sector career don't work as well in international diplomacy.

Vice President Mike Pence and Secretary of State Mike Pompeo listen as President Trump speaks during a meeting.
Vice President Mike Pence and Secretary of State Mike Pompeo listen as President Trump speaks during a meeting. (Kevin Lamarque / Reuters)

It’s often hard for outside analysts to determine what’s driving North Korea’s tactical decisions, but it’s fun to imagine that someone in Pyongyang has been reading The Art of the Deal ahead of a planned summit with the U.S. in Singapore. (Iranian Supreme Leader Ali Khamenei has been digging into Michael Wolff’s Fire and Fury, if his Instagram feed is to be believed.) That would explain North Korea’s move earlier this week when it threatened to pull out of the June meeting if the U.S. insists on full denuclearization: “Know when to walk away from the table” is one of Trump’s rules from his 1987 bestseller.

Trump has also spoken recently about the importance of being able to walk away.

“I think it is going to be a good success,” he said at a rally in Indiana last week, referring to the summit. “And if it isn’t, it isn’t, but you have to have that because you don’t know. We are not going to be walking into an Iran deal where the negotiator, John Kerry, refused to leave the table.”

The president has a point here: A negotiator who is unwilling to walk away from talks is a negotiator who has given up leverage. But his emphasis on walking away also points to a difference between business and politics, and the different repercussions that come in the two worlds. Trump, like many businessmen-turned-politicians, has often found himself frustrated by the slower-moving, checked-and-balanced world of Washington. When it comes to negotiations and deals, his supposed forte, it is not always so easy to simply move on in D.C. as it is in the business world.

This is most evident on international agreements. Consider the North Korea negotiation, assuming that plans for the summit manage to get back on track after this week’s blowup. Managing to arrange a face-to-face meeting is a major coup, but it’s still a high-stakes situation. In the lead-up, some Korea experts fear the U.S. has already given up too much leverage, and Trump is reportedly taking a worryingly casual approach to preparing for the meeting. The summit itself brings new risks, especially if Trump is unprepared or disposed to walk away quickly, because once a top-level conference has been tried and fails, it leaves few options: either a return to the status quo—which has favored nuclear proliferation—or war. As Victor Cha, a Korea expert who Trump considered for ambassador to Seoul, put it in March, “Failed negotiations at the summit level leave all parties with no other recourse for diplomacy. In which case, as Mr. Trump has said, we really will have ‘run out of road’ on North Korea.”

Were Kim Jong Un and Trump sitting down to try to hammer out a real-estate deal, the ramifications of a failure would likely be few. Trump could simply seek new opportunities elsewhere. That doesn’t work in diplomacy, though. It’s not as if the U.S. can simply move on to another rogue state and try to negotiate with them, since the North Korea problem would remain unsolved. A different mutation of the same dynamic has transpired with Iran. Trump has pulled out of the nuclear agreement with Tehran, but he continues to speak hopefully about striking a new and better deal, overlooking the damaging effects of a breach of trust on the first deal. One reason Kerry was so eager to strike an accord was his fear that failure would mean Iranian proliferation.

Trump has displayed a similarly cavalier attitude in domestic politics, where he was surprisingly unbothered by the collapse of his attempt to repeal Obamacare. Here, echoing his approach to North Korea, Trump made a great deal of noise about major legislation but showed little interest in actually boning up on the details of health policy or congressional horse-trading needed to shepherd a bill through. Once the effort collapsed, the president shrugged and moved on. The failure broke a promise to the GOP base, and Democrats are finding health care to be a potent issue in this year’s midterm elections.

These failures are, if not final, certainly enduring. Pulling out of the Iran deal means no new deal is likely. Moving on from health care means Trump won’t attempt an overhaul again in the foreseeable future. And walking away from the table in Singapore would probably end any hope of a diplomatic resolution with North Korea. If the president has not grasped this, it’s because his many years in business taught him a different lesson.

In 1985, Trump snapped up a parcel of land on the west side of Manhattan, paying $115 million for it. He promised a fantastical development, as he was wont to do. But the plan ran into trouble. Four years later, he declined to sell the land for $400 million, but finally gave up in 1994, selling it for a loss: He got back just $82 million. (So much for being willing to walk away.) Trump was right about the area’s potential, because the same land sold again in 2005 for nearly $2 billion. It was a serious missed opportunity for Trump. It also didn’t really matter. He was still rich (if not as rich as he claimed, and not as rich as he could have been); he went on to do more deals; and he eventually got himself elected president.

One big component of Trump’s business success was his willingness and ability to repeatedly fail and move on easily. He famously declared corporate bankruptcy four times. In 2016, The New York Times looked at roughly 60 of Trump’s business ventures over the preceding decade and found an inconsistent record: A third failed off the bat, another third started but didn’t reach full potential, and another third generally succeeded.

Another big component of Trump’s business success was convincing the public that these ventures hadn’t failed even when they had, sometimes going to great lengths to do so. During the 2016 GOP primary, he claimed Trump Steaks (which lasted just two months in 2007 before being discontinued) were still a going concern, slapping his own label on store-bought cuts.

Yet Trump had no real reason to feel ashamed about these failures. Most businesses don’t pan out. According to the federal government, a fifth of new businesses fail in the first year, and most are out of business by year 10. If the Trump record was not as immaculately successful as he claimed, he wasn’t unusually unsuccessful, either. That’s fine. But what works in business is not always easily translatable to politics and diplomacy. Trump is not the first former businessman to encounter this difficulty, but he is taking longer, and with higher stakes, to learn the lesson than some of his predecessors.