Billionaire dealmaker Stephen Schwarzman, the head of Blackstone Group, thought after the 2016 election that he could help Donald Trump navigate some of the most complex negotiations in history.
Foreign government officials desperate to understand America’s new commander in chief flocked to Schwarzman, whose private equity firm has done deals worth billions of dollars globally, knowing he had Trump’s ear.
“Even our closest allies were unsure how to communicate with him,” Schwarzman writes in his newly released memoir “What it Takes: Lessons in the Pursuit of Excellence.”
But now, three years later, even Schwarzman – who writes that he’s served as an intermediary between Trump and the Chinese government amid their ongoing trade war – refuses to predict how it will all play out.
“Only time will tell,” Schwarzman writes at the end of a section on the China negotiations.
Schwarzman, who writes about working his way up from his father’s curtains-and-linens store in Philadelphia, has known Trump for 40 years but declined to endorse him during the campaign, calling him “the P.T. Barnum of America.”
After the election, the self-made billionaire felt he could help the country by becoming a trusted confidant to the new President and his team.
“If the goal is to help your country, it is almost always worth doing,” he writes.
It worked.
It’s clear that Trump respects Schwarzman immensely, according to former Council of Economic Advisers chairman Kevin Hassett.
“During White House meetings on trade, Trump and others on his economic team would regularly quote from conversations they had with Schwarzman,” said Hassett, now a CNN contributor.
The White House did not comment.
In some ways, Schwarzman is the perfect intermediary between America and its biggest trading partners. Over the last decade, he earned the trust and respect of world leaders, especially in China, where Schwarzman has extensive business and philanthropic ties. Schwarzman also has fans on the American side.
Schwarzman is good friends with Treasury Secretary Steven Mnuchin. The two men are neighbors – both have apartments in the same New York City building, writes Schwarzman. And the two are among the only free trade advocates left among the President’s inner circle, especially after the departure of White House economic advisor Gary Cohn.
Yet even with the advice of experienced Wall Street veterans, Trump has found himself unable to close many deals, instead sowing chaos and uncertainty in his many negotiations.
During talks over a replacement for the 1994 North American Free Trade Agreement, Canadian and Mexican officials emailed and tested their ideas on Schwarzman before raising them directly with the administration, Schwarzman writes. In 2018, when the three countries reached an impasse, Schwarzman privately warned Trump about the dangers of fighting a multifront trade war with Asia, Europe and the Americas.
The rest of the world’s economies “would figure out a way to band together and make us miserable,” Schwarzman says he told Trump. He advised that the US should start cutting some deals, beginning with NAFTA.
But Trump’s replacement deal, the US-Mexico-Canada Agreement, is stalled in Congress, and his threat to pull out of NAFTA unilaterally still looms.
Similarly, Schwarzman was hopeful the United States and China could agree to a trade deal early on and avert a full-scale clash. In his book, Schwarzman describes meeting with top Chinese brass in an attempt to defuse economic tensions. He tried to explain the US position to the Chinese officials, including to China’s President Xi Jinping.
In 2018 alone, Schwarzman made eight trips to China on behalf of the administration, he writes.
The ties between Schwarzman and the Chinese government run deep. China’s newly created sovereign wealth fund announced a $3 billion investment in Blackstone ahead of the firm’s IPO in 2007. In exchange, the Chinese government received nonvoting shares that amounted to a roughly 10% stake in the firm. In 2018, China’s fund sold its stake, ending an 11 year investment in the firm.
But Schwarzman describes several instances when the Chinese felt exhausted and slighted. They wanted to understand why US perceptions of China had changed so drastically.
Schwarzman writes that he helped broker a Chinese visit to Washington last September. But three days before the scheduled talks, President Trump announced new tariffs on $200 billion worth of Chinese goods.
“It was another huge blow,” write Schwarzman. “The Chinese lost face and told me they didn’t know what to do or whom to trust anymore.”
