Yes, Danny will engage in trade discussions with other teams, especially as the Feb trade deadline approaches.
Why:
(1) The Cs won't be able to improve in the offseason via FAs given how close to the cap the Cs already are.
(2) Danny believes (and I think he's right) that the best way to put a championship team on the floor is to trade for All Star players. They get the benefit of the doubt from the refs in what is basically a rigged system. He's no dummy, he realizes this.
.... that said, I don't get the obsession with Josh Smith. Yes, he is apparently available, but he is not enough of an All Star to really entice Danny. He'd like to pull a trade similar to what he did for KG or RA. The key is to think of players that want to move, who belong to cash strapped teams, who are All Stars or potential All Stars.
Well, I guess Smith is a borderline All Star, so someone to keep on the list. Iggy is another to keep on the list. I think Tyreke Evans, if his health improves, is another. Think Kevin Love. Think Chris Paul.