President Trump unveiled his tariff regimen Wednesday, and around the world there was a sense of shock, as if the post-Cold War world order had been upended, and no one had seen this coming.
According to Reuters:
WASHINGTON/BEIJING/BRUSSELS, April 3 (Reuters) – President Donald Trump‘s move to impose sweeping tariffs on U.S. imports on allies and rivals alike sparked threats of retaliation on Thursday, intensifying a global trade war that threatens to stoke inflation and raising fears of recession.
Stocks fell, and the markets were in panic. The S&P 500 was down 4%. Wall Street denizens predicted catastrophe, or at least a bumpy ride:
My opinion: Market get obliterated at open but makes a head fake come back on some announcement Trump will negotiate. That said we are in for some rough stuff
— Charles Gasparino (@CGasparino) April 3, 2025
SCOOP: Top Wall Street execs warn the Trump White House that tariff plan could stoke massive pain in terms of ‘”stagflation” at least until trade deals can be reached; it’s the biggest existential threat to the Trump presidency. My latest @nypost exclusive…
— Charles Gasparino (@CGasparino) April 2, 2025
BREAKING: Analysts Im talking to are betting 20 per tariffs, which should be momentarily market positive because they are priced in for NOWS. But be prepared for some rough waters ahead. I keep hearing “stagflation” in the short term — like the next quarter or two — until Trump…
— Charles Gasparino (@CGasparino) April 2, 2025
But the Trump administration explained the matter out very usefully in these tweets here:
In honor of Liberation Day, USTR is spotlighting 10 unfair trade practices faced by American exporters.
1/10: China’s non-tariff measures and high tariffs on U.S. agricultural products, like soybeans, pork, wheat, and corn, have greatly restricted market access for American… pic.twitter.com/0GnVjE0cvz
— United States Trade Representative (@USTradeRep) April 2, 2025
For additional information on unfair trade practices faced by American exporters, please see the 2025 National Trade Estimate Report.https://t.co/fv3ZHSp84t
— United States Trade Representative (@USTradeRep) April 2, 2025
So in reality, these tariffs were not a capricious or unforeseeable moves, they were actually pretty formulaic and predictable. No one was singled out, so nothing personal, only the policy was targeted: Charge high tariffs on U.S. goods, and get high tariffs back. Run a big trade surplus with America, get tariffs to balance it. Even-steven.
Everyone with a brain can understand that.
Yet some trading partners, the ones with chips on their shoulders who like things the way they are, are going bonkers, vowing higher retaliatory tariffs than they already are charging on American goods. China and Europe, with their big markets, actually are planning to do this.
Now facing 54% tariffs on exports to the U.S., the world’s No. 2 economy China vowed countermeasures, as did the European Union – Washington’s friends and foes united in criticism of measures they fear will deal a devastating blow to global trade.
“The consequences will be dire for millions of people around the globe,” EU chief Ursula von der Leyen said, adding the 27-member bloc was preparing to hit back if talks with Washington failed.
U.S. Treasury Chief Scott Bessent earlier warned any retaliatory moves would only lead to escalation.
Smarter nations, though, are not doing that fool’s errand.
They see the tariff formula as a road map, and are responding in their own nations’ best interests.
To be sure, there are some bugs to be ironed out — hopefully, Israel and Trump cut a deal on tariffs which may be premised on trade balances:
Economic officials in Israel are in complete shock over the Trump administration’s decision to impose a 17% tariff on Israel. “We are in shock. We were sure that the decision to completely cancel tariffs on imports from the U.S. would prevent this move. But it didn’t happen.” https://t.co/9FiKgNdTFn
— Amichai Stein (@AmichaiStein1) April 2, 2025
South Korea may be in this category, too:
South Korea Holds Emergency Meeting to Cope With Tariff Crisis
The entire world is dependent on US consumption: the capitulations will be fast and furious
— zerohedge (@zerohedge) April 3, 2025
So the solution is pretty obvious: Drop all of their tariffs on American goods, and line up quickly to cut a deal with the U.S.
Problem goes away. So what is anyone waiting for?
Hedge fund biggie Bill Ackman, who knows how to keep a cool head under market pressure, summed it up very well:
The countries that make the first tariff deals with @realDonaldTrump will make the better deals. The countries that wait or retaliate will regret that they were not part of the early deal group or worse.
— Bill Ackman (@BillAckman) April 3, 2025
In a curious way, Trump is forcing the rest of the world to adopt real free trade, or else die with the tariffs.
That could really free markets as trading partners nations, one after another, take the smarter option. The whole world could bcome a free trade zone, and may the best nation win.
This guy, very smart, (I have had one-on-one conversations with him when he came to visit our editorial page writers at Investor’s Business Daily), knows the score:
JUST IN: Former Commerce Secretary predicts Trump’s tariffs won’t be in place by the back half of 2025 because other countries will rush to the negotiating table.
Former George W. Bush Commerce Secretary Carlos Gutierrez just made the prediction on CNBC.
Gutierrez went as far… pic.twitter.com/8yyGiuwx0j
— Collin Rugg (@CollinRugg) April 2, 2025
Fingers crossed that they catch on very soon, and all the problems associated with tariff taxes makes a quick exit.
The ball’s in their courts now. It’s in their hands to make this go away by dropping all of their tariffs on American goods as Trump requests. It can’t be worth it to keep them, and Trump knows this. Free trade for the world then! Let it happen.
Image: Pixabay / Pixabay License
This article was originally published at www.americanthinker.com
