Around the world, the smart way and the dumb way to respond to Trump's tariffs

 

By Monica Showalter

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.

 

The penalties announced on Wednesday unleashed turbulence across world markets and drew condemnation from other leaders facing the end of an era of trade liberalization that has shaped the global order for decades.

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:

But the Trump administration explained the matter out very usefully in these tweets here:

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.

 

Reuters continued:

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:

South Korea may be in this category, too:

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:

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:

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.

https://www.americanthinker.com/blog/2025/04/the_smart_way_and_the_dumb_way_to_respond_to_trump_s_tariffs.html