The Mar-a-Lago Accord: Redefining the Rules of International Trade

This isn’t just about imposing tariffs or leveraging the U.S. economy—it’s about using the Ultimatum Game to control the entire negotiation.

For decades, trade wars have been viewed as win-loss games—a zero-sum contest where one country’s gain comes at the expense of another. But with the Mar-a-Lago Accord, Donald Trump and his advisors are introducing a radical shift: they’re changing the structure of the game entirely. This isn’t just about imposing tariffs or leveraging the U.S. economy—it’s about using the Ultimatum Game to control the entire negotiation.

Trump’s recent statement lays the foundation for this new strategy:

"The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER... There is no chance that the BRICS will replace the U.S. Dollar in International Trade."

At first glance, this might seem like another aggressive trade war tactic. In reality, it’s something much bigger. By issuing a stark ultimatum—cooperate or face total loss—Trump’s team has redefined how global trade operates.

Trade Wars vs. the Ultimatum Game

Traditional trade wars follow a win-loss model: one nation imposes tariffs, another retaliates, and both sides endure economic pain while vying for dominance. This back-and-forth dynamic leaves outcomes uncertain and often damages both economies in the process.

The Mar-a-Lago Accord, however, employs the principles of the Ultimatum Game, fundamentally altering this dynamic. In the Ultimatum Game:

1. One player (the U.S.) sets the terms.

2. The other player (a trading partner) must either accept or reject them.

3. Rejection results in total loss for the rejecting party, with minimal downside for the initiator.

Trump’s strategy takes this concept global. By threatening 100% tariffs and exclusion from the U.S. market, he’s offering trading partners a binary choice:

• Trust and align with U.S. objectives, preserving economic ties and access to the world’s largest economy.

• Resist and face isolation, with no opportunity for compromise.

This isn’t just about winning a trade dispute—it’s about removing the opponent’s ability to play the same game.

How This Changes Global Trade

The Mar-a-Lago Accord shifts the structure of trade negotiations from a battle of attrition to a stark ultimatum. The consequences for trading partners are clear:

• Accept the U.S.’s terms and enjoy continued benefits of trade and cooperation.

• Reject the terms and face devastating economic consequences, including exclusion from the U.S. economy and crushing tariffs.

This approach removes the uncertainty of traditional trade wars and forces other nations to act decisively in favor of alignment with U.S. policies.

Localism, Not Protectionism

Critics may call this protectionism, but that misrepresents the strategy. The Mar-a-Lago Accord is not about retreating behind economic walls—it’s about leveraging the principles of localism to redefine trade relationships.

• Localism builds resilience: By prioritizing domestic industries and supply chains, the U.S. ensures its economy remains strong, regardless of external disruptions.

• Localism creates leverage: By limiting the options of trading partners, the U.S. consolidates its influence while reducing dependency on unreliable nations.

• Localism redefines alliances: It fosters trade based on reciprocity, ensuring mutual benefits rather than lopsided agreements.

The Ultimatum Game in Action

Trump’s advisors, particularly Scott Bessent, understand that the Ultimatum Game doesn’t just impose leverage—it forces clarity. By removing the middle ground, it compels trading partners to reveal their true intentions. This approach mirrors high-stakes scenarios like the famous Golden Balls dilemma. (Watch this fascinating Golden Balls episode.)

In this framework, the U.S. isn’t merely a player—it’s the rule-maker. The Mar-a-Lago Accord establishes a structure where cooperation isn’t just advantageous—it’s the only rational choice.

A New Global Framework

Under the Mar-a-Lago Accord, nations are categorized into green, yellow, and red buckets:

1. Green nations fully align with U.S. objectives, enjoying favorable trade terms and partnerships.

2. Yellow nations cooperate selectively, facing restrictions until they fully commit.

3. Red nations resist alignment and face punitive tariffs and economic exclusion.

This framework makes the Ultimatum Game explicit: nations must choose alignment or irrelevance.

Beyond Tariffs: A Grand Vision

The Mar-a-Lago Accord is more than a trade policy—it’s a strategy to reshape the global economic order:

• Reinforcing the Dollar’s Dominance: By countering BRICS’ attempts to create rival currencies, the U.S. secures the dollar’s position as the world’s reserve currency.

• Integrating Trade and Geopolitics: Trade isn’t an end in itself—it’s a tool for achieving broader U.S. objectives, from supply chain security to countering military threats.

• Creating a New Global System: Like Bretton Woods, this Accord establishes a framework for international cooperation, but on terms defined by the U.S.

For My Readers Who Speak Spanish

I recently had the pleasure of participating in the 10amPro podcast with Hernán Jaramillo and Darío Palacio, a group of entrepreneurs from Medellín who think big, think outside the box, and are betting on technological renewal in Latin America. In the podcast, we delved into our macro framework and discussed key topics such as:

• The most significant force shaping the global macro landscape today is the shift from globalization to localism.

• Why diversification is no longer working in today’s environment.

• Why the mindset of being "hedged" and safe against everything is the worst decision in the long run.

• How a system without volatility loses its ability to learn and becomes obsolete over time.

• Our three foundational investment blocks: AI & Web 3.0, Semiconductors, and Electricity.

• Bitcoin as the electricity standard for the future.

A Call to Action

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The world is shifting beneath our feet. The Mar-a-Lago Accord is just one example of how the rules are changing. What was once safe—diversification, hedging, avoiding risk—is now dangerous. What was once volatile is now necessary for growth.

The future belongs to those who don’t just adapt but thrive in uncertainty.

The rules have changed. Will you?

Thanks for reading,

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Guillermo Valencia A

Cofounder of Macrowise

December 1st , 2024