I am among the few who think it might eventually prove itself a good idea.
To start with, Europe has no good cards to play. Ultimately, Europe will side with the United States while it builds self-sufficiency on several fronts, especially defense. Europe also recognizes that the complete relocation of production capacity into China wasn't good in the long run; it's just that they had no ability to act on their own.
The US has repeatedly suggested publicly that it's not entirely about tariffs, and more might have been said privately. The tariffs the EU and Britain will drop are probably not what the US is after; what the US wants is to reduce global demand for Chinese manufacturing. Europe will find it easier to sell this—bringing manufacturing back and protectionism even at the cost of say, welfare and environment—to the public due to the violent shakedown over the past two weeks, as well as what happened with Ukraine and Russia. Ongoing European emergency measures to increase defense spending will be followed by incentives to rebuild strategic industry—like how China supported civilian–military partnership with policy.
Meanwhile the Indian government is already looking for ways to replace Chinese imports with US imports, where it can [1]. Japan and North Korea will follow suit; Trump is already saying that Korea needs to pay for US troops.
The US is (in my view) on solid footing here. At the very least, they get better trade deals from everyone else—Europe, India, Korea, Japan, Taiwan, etc. A number of companies will move production back into the US, and the government can prioritize those with more military value (chip-making, batteries, cars, shipbuilding [2] , etc.). And if the US can convince others to start decoupling from China, this will weaken Chinese manufacturing capacity.
Given the pain it's going to inflict in the short term, Trump is the only person who could have started this trade war. There might have been ways to do this without such a shake-up, but I am not convinced that this was a stupid move.
This was an anti-China move right from the beginning, disguised as an outrage against everyone's tariffs.
[1]: https://www.financialexpress.com/business/industry/replace-c...
[2]: https://www.scmp.com/economy/china-economy/article/3306177/u...
To clarify: none of this is China's fault. They did a fantastic job for their country, pulling hundreds of millions of people out of poverty.
I think EU will be fine, it really depends on how much the US cares about advancing Russian interests.
Long game, the UK may transform into being a sort of vassal of the US, assuming it survives as an entity. The EU interest may align more with China. If the US is de-empathizing NATO, they need a counterweight to the Russia/US axis.
It's the end of pax americana, and the future is more uncertain.
Or this is maximum negative emotionally charged sentiment and 5 years from now won't look all that much different.
It is really that you should just read what Peter Zeihan says and know that is exactly what is not going to happen.
Disrupting global alignment creates risks and unpredictability. Especially when driven by a cult of personality. Things that had 1% probabilities in 2010 will have 25% probabilities on 2030.
Zeihan lives in a 1960 worldview - oceans are not a meaningful barrier now as space and nuclear technology proliferates.
Withdrawal from the world was stupid in 1920 and doubly so now. There’s a lot of magical thinking that humans who live in places that aren’t in North America lack the ability to think or plan.
China is the EUs largest export market. I’m not so sure the EU will align with the US here.
I have the complete opposite opinion. The US has no cards to play in the EU and is screwed in the medium and long term.
The only reason the EU was tolerating those massive tech companies which contribute close to nothing in the EU was because the US was pulling its weight in EU defense.
Now that Trump openly sided with Putin, that's gone. Trump has no card to play in the EU anymore. He could even insult EU leaders publicly if he wanted to but pushing out Zelensky like he did was the only thing he could not afford to do.
Then on the investment side, the EU will now seen as a more stable and better environment than the US which changes policies every Tuesdays. The US will be experiencing a similar effect to brexit but longer and more severe.
The status of the dollar is clearly questioned as well. Will the US remain the top economic power with those tech companies atrophied and a local recession? I'm not so sure.
> at the cost of... welfare
If politicians no longer care about winning elections, then they might campaign on this.
I also imagine this is maximum negative sentiment.
I follow the Chinese economy pretty closely and I just can't imagine 2025 passes without a deal.
Of course, neither Trump or Xi were going to back down here before a big meeting. I don't see how this is sustainable on any real time frame though for either economy.
Some people seem to be framing this as some kind of win for China. That is crazy. Chinese stocks had been in the toilet for a while, got a slight bump and that was mostly erased last week. I am far more confident in my US bets than China bets here.