How Will Donald Trump’s Tariffs Affect Relations With Allies? – One needs a quick thinking mind and steely demeanor to handle all of the global financial events associated with President Donald Trump’s tariff program.
Financial markets are whipsawing, new economic data on inflation is coming in, and allies are wondering what could possibly be next.
Donald Trump clearly has a lot of cards to play, and chaos to create.
The World Fears Donald Trump and His Tariffs
Today, the European Commission announced that it would place a 90-day freeze on the retaliatory tariffs it would lay on the United States. European Union leader Ursula von der Leyen said she wanted “to give negotiations a chance.”
Von der Leyen warned that if talks to reduce tariffs are not successful over the next three months, the tariff countermeasures from the European Union would kick in. However, she remained optimistic that the Europeans and Americans would reach a positive outcome.
“Tariffs are taxes that only hurt businesses and consumers,” von der Leyen added. “That’s why I’ve consistently advocated for a zero-for-zero tariff agreement between the European Union and the United States.”
European businesses are bracing for uncertainty over the rest of Trump’s presidency. They are trying to find some predictable form of economic statecraft from the White House and they are not seeing it. This may have long-term repercussions for the health of diplomacy and international relations.
Let’s look at what U.S. allies are thinking about regarding the trade conditions and the overall Trump tariff program.
Bangladesh
Other allied countries are smarting from the trade turmoil, but some remain hopeful.
Bangladesh is ready to make a deal with the United States and its leader Muhammad Yunus is thankful that he could see the 37 percent tariffs on his country be lifted. “We will continue to work with your administration in support of your trade agenda,” Yunus said.
Germany
Germany’s future chancellor Friedrich Merz was less respectful to the United States. “We are determined to defend ourselves,” he told a German radio station. “Unity helps,” he added. This could mean that Germany would resist a one-on-one tariff agreement with the United States. Germany is likely worried about its auto industry that relies so much on the American market. Steel is also a concern for Germany.
Greece
Greece is not too hostile to the United States – at least in public. “As far as Greece is concerned, we have a strategic partnership with the U.S.,” said Prime Minister Kyriakos Mitsotakis. “I have worked with President Trump before and I can work very well with him again addressing regional challenges.”
However, that is somewhat of a vague statement from Greece, but it is hopeful. Top U.S. exports to Greece are petroleum, scrap iron, and scrap copper. Greece sends large quantities of processed vegetables, processed fruits and nuts, and aluminum plating to the United States.
India
For India, Trump originally had a 27 percent tariff on the country and that has dropped to 10 percent. One unnamed Indian trade official told Reuters that the nation wanted a “quick” unilateral trade deal with America.
India was one of the first countries to plead with the Trump administration for negotiations.
Japan
Japan is taking a harder line than India. Ryosei Akazawa, Japan’s Minister for Economic Revitalization, will be the lead trade negotiator for his country versus the United States. Akasawa said his position “is unchanged” about the country’s concern over tariffs on cars and aluminum.
“We continue to express our strong concerns and strongly request that they be reviewed,” he told Bloomberg.
South Korea
South Korea is hopeful that its goals for trade can be met. South Korean trade envoy Cheong In-Kyo said the Trump tariff pause “provides room for negotiations.” South Korea wants to eliminate the tariff of 25 percent on the auto industry.
Taiwan
Taiwan is taking a neutral approach and is open to negotiations. Taiwanese Foreign Minister Lin Chia-lung said Trump’s pause gives the country “breathing room.” Lin believes that future talks will be substantive and cooperation is possible. But the country is worried about the future of high-tech goods it sends to the United States.
This Won’t Be Easy
Taking all of this under consideration is difficult because the public stance is measured and careful to go along with what is said privately behind closed doors that could be more negative in tone.
The most significant sticking point for Trump and his negotiators will be cars and steel. Germany, Japan, and South Korea are not going to bend much when it comes to their auto industry and metals production companies. America is also concerned about its own vehicle production capabilities and the health of steelmakers.
One of the biggest problems is certainty for allies. The goalposts are changing daily, and then the country must make a statement to the media about what the future will bring in negotiations. This is difficult for anyone’s practice of statecraft and diplomacy.
No One Wants to Anger Donald Trump
No one wants to anger Donald Trump, but they also must pursue their national interest. Economies that depend so much on trade with the United States are worried that a trade war will hurt the domestic production of champion industries like cars and steel.
There are also practical concerns. How is Trump and his trade team going to negotiate unilateral deals with all of these countries in the next 90 days? If there are over 70 countries that want to make an agreement, there is not enough time in the day to achieve one-on-one success with all of the governments. Germany, South Korea, and Japan are going to play hardball. These talks will take over 90 days. The Trump administration may decide to lump them together into groups depending on the industry, but that negotiating ploy could take a lengthy period of intense talks too.
This deal-making will all be eventful and negotiating teams will brace for the coming weeks. Trump may have to bring numerous countries to Washington and get the conference rooms ready. Some nations will be easier to negotiate with than others and hard feelings could ensue that will have ramifications for U.S. diplomacy for years.
About the Author: Dr. Brent M. Eastwood
Brent M. Eastwood, PhD is the author of Don’t Turn Your Back On the World: a Conservative Foreign Policy and Humans, Machines, and Data: Future Trends in Warfare plus two other books. Brent was the founder and CEO of a tech firm that predicted world events using artificial intelligence. He served as a legislative fellow for U.S. Senator Tim Scott and advised the senator on defense and foreign policy issues. He has taught at American University, George Washington University, and George Mason University. Brent is a former U.S. Army Infantry officer. He can be followed on X @BMEastwood.
