In contrast to the 1930s, today’s Europe is unified and able to create an international trade network stretching from Shenzhen to São Paolo.
Donald Trump referred to it as “Liberation Day.” Last week, in his typical dramatic fashion, the U.S. President imposed a series of tariffs on America’s trade allies.
10 per cent
on most imports,
34 per cent
on Chinese goods and
20 per cent
On items from the European Union, the message echoed classic Trump rhetoric: “America first,” come what may with the rules.
However, despite all the nationalistic fervor, this action was not an act of liberation but rather one of escalation. It also offers Europe a significant chance, not only to protect itself against economic aggression but to
restructure the worldwide trade system
Now that America under Trump has stepped back from its customary position as guardian.
Among the many dramatic episodes during Trump’s presidency, none capture the lighthearted approach he took towards governance more than his “Liberation Day” spectacle. In the Rose Garden, the President displayed a graph contrasting the tariffs imposed by foreign countries on the United States with those implemented by his administration as countermeasures.
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The tariffs were
devised using an imperfect equation
That linked trade deficits directly to tariff rates—a method no respected economist would support. This wasn’t merely economic ignorance but was emblematic of a presidency that preferred
showmanship to strategy
When in such hands, the United States loses its right to be a global leader, since true leadership requires an understanding of reality rather than a preference for illusions.
Trump’s trade philosophy is rooted in a 19th-century world view:
non-zero-sum, nationalist, and unapologetically deal-focused
The era of post-war consensus on multilateralism and collective economic growth has ended. It has been replaced with a simplistic game of leverage. According to this view, the United States is seen as an essential marketplace, and all others must compensate for the opportunity to enter it.
However, as the adage goes, a crisis is wasted opportunity. The recent attack by Trump on trade relationships with partners and allies calls for defiance rather than submission. This is not the time for humility but an occasion to take up the banner of international leadership. Europe needs to grasp this chance firmly with both hands.
For all its flaws, Brussels still believes in order. Not just economic order, but the order that stems from rules, norms and mutual obligation. Now it must do more than believe – it must act.
Prior to Trump’s “Liberation Day,” Brussels had already been working on implementing an initial set of tariffs covering up to
Euro26 billion
($28.4 billion) worth of American products in reaction to the recently implemented U.S. steel and aluminum tariffs. Additional countermeasures are being prepared, probably focusing on taxes aimed at sectors crucial to key voting groups supporting Trump’s base.
Intelligent, yet inadequate. Reciprocal tariff measures serve as a strategy instead of a long-term plan; Europe needs to shift gears, not merely block moves. This transformation starts with reconsidering Europe’s position within the worldwide trading framework, presenting itself proactively.
financially and politically autonomous counterpart
rather than being seen as a junior partner of the US – and instead behaving like an equal by broadening its trading strategies.
China might serve as an uncertain yet essential collaborator within this strategic framework. In 2023, commerce between the EU and China amounted to €739 billion, positioning China as the European Union’s second largest trading ally following the United States. Instead of pulling back, Europe ought to adopt a focused approach.
trade deal with China
one that is grounded in shrewd self-interest rather than naivety or recklessness.
This agreement might center around mutual accessibility, safeguards for intellectual property, and harmonization of regulations in specific industries, notably
sustainable technology and advanced production
For Europe, the benefits might be significant through the creation of new export opportunities, increased diversity in supply chain management, and a stronger presence within Asia’s biggest market. In China’s case, this move would demonstrate their commitment to reforms and provide an essential counterbalance to potential economic aggression from the United States.
Nevertheless, Europe ought to direct its attention beyond just China.
The Mercosur bloc
In South America, ASEAN, and the AfCFTA, these alliances form the framework for a multipolar trading system. Europe ought to expedite negotiations and provide reduced tariffs along with technological assistance to countries adopting its regulatory standards.
Imagine an agreement with Brazil by 2027 inundating European harbors with eco-friendly products.
beef
, or an agreement with Vietnam ensuring
semiconductors
The concept is not about separating from the US — at least not for now — but rather having protection against the consequences of the Trump presidency, which could potentially worsen.
Meanwhile, Europe needs to overcome its own inertia. The single market is still incomplete, as services remain disjointed, digital progress is halted, and infrastructure funding falls short. Europe’s reaction should not be limited to implementing counter-tariffs; instead, it must outline a strategy for enhancing industrial strength.
All of this will come at considerable cost and complexity. Coordinating among 27 countries involves significant diplomatic effort. However, the alternative—a Europe tied to Washington’s erratic political turmoil—is even more daunting.
Trump’s tariffs extend beyond mere products; they serve as an ideological statement promoting isolationism and rejecting the international framework that the U.S. helped establish. However, history offers a contrasting narrative, hinting at overconfidence facing consequences. Back in 1930, the
Smoot-Hawley Tariff Act
transformed a recession into a worldwide depression, highlighting the harsh consequences of isolationism. Trump’s “Liberation Day” bears that same arrogance.
The distinction lies in how Europe has transformed from a fragmented entity into a powerful union. This new Europe can craft a more definitive conclusion, not through bravado but via a composed and unwavering strategy. Such a Europe responds with retaliatory tariffs on goods like Harley-Davidsons and iPhones, yet simultaneously constructs an intricate trading network spanning from Shenzhen to São Paulo. Essentially, this version of Europe demonstrates that true leadership doesn’t hinge on shouting matches or empty threats; instead, it endures beyond those who merely boast loudly.
Trump wants a fight. Europe should give him a lesson.
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The article initially appeared on the South ChinaMorning Post (www.scmp.com), which is the premier source for news coverage of China andAsia.
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