Amid constant contradictions and deliberate ambiguities, Donald Trump has never clarified to what extent his trade war is conceived as an end in itself – new protectionist barriers to stymie global competition – or as a means of international intimidation, serving other political objectives. So far, this duplicitous lack of clarity remains: the powers that have come to terms with the American president, such as the European Union and Japan, and yielded to his main demands, are nonetheless suffering a significant increase in tariffs.
The British model
After declaring economic war on Liberation Day
in April, Trump immediately changed course at the first signs of financial panic, proclaiming a three-month tariff truce. In May, Keir Starmer’s British Labour government was the first to accept the unilateral conditions imposed by the White House. Although it was not contributing to the US trade deficit, the UK pledged to reduce barriers to American goods and accepted a 10% tariff without retaliation. The same rate was guaranteed, through a quota system, for virtually all British car exports to the US.
The range of comments was limited: from relative relief at having landed the least worst option
, to harsh criticism of the unquestionably negative substance of the agreement. For most experts, the agreement was primarily a political announcement, vague in content and imprecise in its deadlines, and not legally binding. William Reinsch, of Washington’s Center for Strategic and International Studies, concluded that for the current US president, the show is more important than the substance. He wants an Oval Office press conference where he can claim victory and say the agreement is the greatest ever
. His advice to other governments was to replicate Starmer’s approach with Trump: If they are willing to give him the appearance of a victory, they may end up with more substance
.
Promises of capital investment
At the end of the three-month truce, Trump added one final month while reviving his April threat of reciprocal tariffs
, ranging from 25% to 50% for most of the countries involved. This time there were no signals from the markets to restrain the White House, perhaps thanks to the provisional armistices confirmed in the meantime with China and Mexico, crucial suppliers of the US economy. In July, under renewed pressure, ten governments accepted Trump’s conditions, committing to substantial investments and purchases in the United States in exchange for roughly halved tariffs: 15% for the EU, Japan, and South Korea; 19% for Indonesia and the Philippines; 20% for Vietnam. In a triumphant assessment in The New York Times in August, US Trade Representative (USTR) Jamieson Greer added Thailand, Malaysia, Cambodia, and Pakistan to the list of bilateral agreements, without elaborating on their terms.
The agreement with Japan, announced on July 22nd by Trump as perhaps the largest deal ever made
, was implemented and clarified by a series of official documents on September 4th. The 15% indicates a maximum ceiling, not an addition to existing tariffs: a concession that initially seemed to have been wrested only by the EU. The 15% threshold also applies to the automotive sector, which is crucial for Japanese exports, giving it an advantage over Korean manufacturers who, at the time of writing, have not obtained the same guarantee. In addition, Tokyo is committing to annual purchases of $8 billion in food products and $7 billion in energy from the US, but most importantly, it is promising $550 billion in investments by the end of Trump’s presidency.
Extortion and reparations
According to a memorandum signed by Chief Negotiator Ryosei Akazawa and Commerce Secretary Howard Lutnick, the US government will determine which strategic projects Japanese capital will be allocated to, and Tokyo will have 45 days to provide the funding; in case of refusal, President Trump reserves the right to further raise tariffs. Profits from Japanese investments will be split equally between the two governments up to a certain threshold, after which 90% will go to the US. According to Alan Beattie of the Financial Times, it is still unclear how it will turn out in practice. But as far as Trump is concerned, humiliating and abusing trading partners means he’s already won
.
In May, Beattie compared the agreement between Trump and the UK to the medieval practice of Danegeld, a tribute paid by Anglo-Saxon rulers to Viking invaders in order to ward off their raids. The conditions imposed on Japan are, in effect, similar to reparations for a war that was never fought. It is difficult to imagine that they will actually be implemented.
The South Korean government, which promised similar investments of $350 billion in its own trade agreement with the US announced on July 30th, immediately made clear that it would not accept such terms. It is evident that these are a series of complex, interconnected battles in full swing, but, at least in the immediate term, the hundreds of billions promised are political figures – and it is far from clear to what extent they reflect Washington’s actual power relations with Brussels, London, Tokyo, and Seoul.
A necessary move?
The imbalance is also apparent in the July 27th agreement announced by Ursula von der Leyen and Trump from his Scottish golf resort in Turnberry. The EU accepted 15% tariffs and promised to lower barriers to American goods, purchase $750 billion in energy from the US over three years, and coordinate $600 billion in investments from European companies. Initially, most comments criticised this as a humiliating surrender, but as we documented in the last issue of this newspaper, gradually the view that the agreement was the least worst option
gained ground, with adherents noting that it avoided a spiralling trade war like that of the 1930s. The Economist went so far as to see subtler wins
for the EU in the issues that the Turnberry agreement left out: VAT, digital rules, and European policy towards China. President von der Leyen, Trade Commissioner Maroš Šefčovič, and Director-General Sabine Weyand defended themselves with a series of arguments.
First, European governments agreed that a deal was necessary. The alternative threatened by Trump was simply unacceptable: prohibitive 30% tariffs and, above all, the possible withdrawal of military support for Ukraine. Second, the EU has secured the best trade agreement so far, so European exporters will enjoy a relative competitive advantage in the US market. Furthermore, Brussels did not compromise on principles, refusing to negotiate changes to its rules in areas like food safety or digital privacy. Finally, the EU’s real political response to American coercion will be twofold. First, rearmament, in order to establish a space for strategic autonomy. Second, a renewed push to diversify its foreign trade. On September 3rd, the Commission proposed modernising its agreement with Mexico and, above all, the long-awaited ratification of a major agreement with the Latin American bloc Mercosur. The EU is accelerating all free trade negotiations, starting with India and Indonesia, while also moving towards alignment with the vast Trans-Pacific Partnership (TPP), which has already welcomed the United Kingdom.
Open games
Meanwhile, the Supreme Court casts a shadow over Trump’s offensive. By the end of the year, it should establish the constitutional legitimacy of the powers wielded by the White House to impose reciprocal tariffs
and declare the trade deficit a national emergency. Could Brussels and Tokyo have also considered this time factor in agreeing to such seemingly disadvantageous conditions? From every point of view, the bilateral agreements Trump obtained this summer should be seen as ongoing battles rather than achieved results.
The evanescent nature of the agreements seems to confirm this hypothesis. As Bertille Bayart notes in Le Figaro, the negotiations are opaque. Nothing is written down, not even the ‘agreements’ that have been announced
. World trade policy has become a giant souk
, where direct access to the Oval Office is decisive for heads of government and big economic groups. Economist Richard Baldwin also speaks of a bazaar
where Trump, like a carpet merchant, starts with very high tariffs as fodder for the media and the American electorate, and then negotiates discounts and exemptions. Reinsch writes that the agreements contain few actual commitments and many promises
, often interpreted differently by the governments involved. It is clear that negotiations are far from over
and, in fact, will probably become a never-ending story
.
Ultimately, the Trump tornado is simply uncovering the fragile architecture of international law, laying bare the fierce reality of imperialist relations. Trade agreements and diplomatic treaties will always be partial and temporary, both because they reflect the changing power relations between States, which are constantly transformed by uneven economic development, and because they are paper walls, destined to be swept away when they conflict with the interests of power.
Herds of wolves
In his August op-ed in The New York Times, USTR Greer went so far as to describe the Turnberry agreement with the EU as the foundation for a new global trading order
, which will replace the current WTO-dominated system that he describes as untenable
for the US and advantageous for China. In recent months, many have returned to declaring the death of the World Trade Organisation. Its director-general, Ngozi Okonjo-Iweala, on the other hand, insists on the optimistic argument that the rest of the world has mostly continued to trade on normal terms
, respecting multilateral rules and resisting protectionist contagion. According to the American analyst Baldwin, the US referee has definitively left the field, but everyone has continued to play by the rules: American stewardship [has been] replaced by ‘leadership herds’ – fluid, informal coalitions aligned by mutual interest
. Seeking to downplay the risk of confrontation between blocs, these arguments claim that a silent multilateral reaction to Trump’s assault is already underway, albeit not in the form of the open challenge which had been hoped for, for example, by former Trade Commissioner Pascal Lamy.
We do not know whether Europeanist ideology could adopt this image of the international community as a peaceful herd, capable of uniting to defend itself against the US, the former sheepdog that turned out to be a wolf. The truth is that there are no sheep among the powers of imperialism, so much so that their main and decisive reaction, with Europe at the forefront, is to accelerate rearmament. The expansion of the European arms industry, according to the Financial Times, is on a historic scale
.