Arnaud Bertrand@RnaudBertrand
It is indeed "one of the most extraordinary Truth posts of Trump's presidency" in the sheer level of gaslighting at play: he's trying to make one of the biggest and clearest humiliations in US history look like a win.
But there's no amount of lipstick that can disguise this pig. What happened is remarkably similar to the 2022 Liz Truss fiasco in the UK: Trump came out with a remarkably foolish and terribly executed policy that created a market panic—including in the bonds market—and he had to walk it back.
But unlike the British system that—for better or worse—can get rid of woefully incompetent Prime Ministers (that is, more incompetent than the average), the U.S. is stuck with Trump.
And unlike Liz Truss, Trump remains insulated by a circle of sycophants like Lutnick who reframe humiliating capitulations as 'extraordinary' triumphs, and a voter base that interprets even his most flagrant policy failures as masterful 4D chess moves.
Fact is, even after this retreat, the U.S. is in a far worse position than it used to be.
Contrary to what Lutnick and Trump are saying, what this episode proved beyond doubt is that the world is NOT ready "to work with President Trump to fix global trade". In fact, besides Israel's Netanyahu, I haven't seen a single country on earth come out publicly to support Trump's plan.
Sure, a couple of weaker countries who are heavily dependent on trade have reluctantly come forward to find a way to mitigate the damage Trump would do to their economies but to conflate this with enthusiastic cooperation is pure fantasy.
What we're witnessing instead is damage control by nations caught in the crossfire of his insane economic policies. And you can be sure that the long-term strategy of these countries will now be to reduce dependencies and trading links to the U.S. in order to avoid being caught in a similar situation in the future.
More importantly, the countries that together make up about 50% of trade with the U.S.—namely Canada, the EU and China—have all announced retaliatory tariffs and measures, which a) means that Trump's claim that countries other than China "aren't retaliating in any way, shape, or form against the United States" is a complete lie and b) shows that his approach has accomplished the remarkable feat of uniting geopolitical rivals in opposition to him.
Which is undoubtedly why his new approach seems to be to single-handedly focus on China, with a retreat to the good old U.S. strategy of trying to get others to help them contain China.
This has zero chance of working either, for 2 main reasons.
The first one is that if Trump has demonstrated one thing in the past 3 months, it's that he's fundamentally unstable and unreliable, and so is the United States. His chaotic governance sends a clear message to the world: America's word means nothing beyond the next Truth Social post.
If the notion that a country would take the risk of putting all its eggs in the American basket was already delusional before his presidency; it is now beyond absurd. What he's done is transform America from a cornerstone of global trade into a risk factor that must be hedged against.
The second one is that the "deal" on the table for these countries is absolutely repugnant, from their standpoint.
I mean, think about it: the "deal" would presumably be for these nations to abandon or significantly reduce their economic relationship with China—their largest trading partner in many cases—in exchange for a trading relationship with the U.S. that is worse than it used to be, with 10% additional tariffs. In effect it's asking countries to sacrifice their economic sovereignty and strategic flexibility for a lesser punishment.
It's a lose-lose proposition that might play well on Truth Social, but will get you laughed out of the room in the world of international relations. Unless you're say a tiny country that has the misfortune of being too weak and dependent on the American market.
But even in this latter case, these countries might amuse Trump in the short-term but they'll undoubtedly put in place long-term strategies to de-hitch themselves from the US crazy train as fast as possible in the medium term.
So all in all, what we're looking at here is not a strategic masterstroke but the desperate flailing of an administration that didn't anticipate how markets and trading partners would respond to economic coercion.
Trump is "teaching the world a lesson" all right: he taught them that America is now the biggest threat they face for their prosperity and the result of this won't be to "work with him", but to hedge themselves as much as they can from the American madness he's unleashed.
History will remember this not as an "extraordinary" moment of American strength, but as the point when the world concluded that diversifying away from the American market was no longer just economically prudent but existentially necessary for their own economic security.
