The global chessboard is finally in motion.
President Trump’s sweeping tariffs have landed, and the world has responded. We can now see who’s ready to play in this grand reset—and who isn’t.
Three clear response strategies seem to be emerging. Let's check the updates so far🧵
President Trump’s sweeping tariffs have landed, and the world has responded. We can now see who’s ready to play in this grand reset—and who isn’t.
Three clear response strategies seem to be emerging. Let's check the updates so far🧵
First, let's recap the tariffs:
-UK, Israel, UAE, Saudi face a 10% baseline.
-Others were slammed: China, Taiwan, Japan, and EU endure steep duties—up to 50%.
-Semiconductors & energy stayed partly sheltered for a lucky few.
-Russia, Cuba, Belarus, North Korea were excluded.
-UK, Israel, UAE, Saudi face a 10% baseline.
-Others were slammed: China, Taiwan, Japan, and EU endure steep duties—up to 50%.
-Semiconductors & energy stayed partly sheltered for a lucky few.
-Russia, Cuba, Belarus, North Korea were excluded.
RETALIATION STRATEGY
China, Canada, and the European Union occupy the retaliation corner, each countering U.S. tariffs with carefully measured blows.
🇨🇳China moved first, applying 34% duties on American goods and restricting rare earth exports vital to U.S. tech and defense. In parallel, it filed a formal WTO complaint, painting itself as a guardian of rules-based trade—a striking inversion of the usual narrative. Chinese Government launched Anti-Dumping Investigations on U.S. Medical products, Solar panels and EV components. It has also started selling US Treasury bonds to drive up yields (undermining Bessent’s efforts to refinance at lower rates) as well as signaled an intent to weaken the Yuan. Officials are also contemplating a fresh round of stimulus.
🇨🇦Canada’s reaction was similarly firm. Prime Minister Carney dismissed Trump’s move as “very dumb” and slapped 25% tariffs on C$30B of U.S. goods—from everyday grocery staples to motorcycles. Ottawa threatened an even broader barrage if Washington’s new levies remain in force. Canada is also using every legal channel possible, pursuing WTO complaints and invoking the USMCA to challenge the legality of U.S. actions.
🇪🇺For its part, the EU faces a blanket 20% tariff, plus heavier hits on steel, aluminum, and autos. European leaders have responded by preparing a “mirror list” of U.S. products for retaliatory tariffs. Despite the heated rhetoric—calls of “unjustified” and “unprovoked”—EU officials are not acting purely out of indignation. Each countermeasure is strategic, targeting iconic American industries (think bourbon or Harley-Davidson) to pressure U.S. political constituencies.
Interestingly, beneath the EU’s tough talk lies a sense of nostalgia for a rules-based global trade order. But cracks are visible. Some member states, reeling from economic pressures, have grown more ambivalent about globalism. It’s telling that UK Prime Minister Keir Starmer openly declared, “Globalization is dead,” underscoring how mainstream that sentiment has become.
In short, retaliation from these major players is neither impulsive nor purely symbolic. Whether it’s China presenting itself as the “rule-abider,” Canada lining up economic counters, or the EU grappling with its own fragmentation, each move aims to reshape U.S. calculations—and strengthen the retaliators’ negotiating hand. The irony, of course, is that Washington once championed the very multilateral norms these nations now uphold.
China, Canada, and the European Union occupy the retaliation corner, each countering U.S. tariffs with carefully measured blows.
🇨🇳China moved first, applying 34% duties on American goods and restricting rare earth exports vital to U.S. tech and defense. In parallel, it filed a formal WTO complaint, painting itself as a guardian of rules-based trade—a striking inversion of the usual narrative. Chinese Government launched Anti-Dumping Investigations on U.S. Medical products, Solar panels and EV components. It has also started selling US Treasury bonds to drive up yields (undermining Bessent’s efforts to refinance at lower rates) as well as signaled an intent to weaken the Yuan. Officials are also contemplating a fresh round of stimulus.
🇨🇦Canada’s reaction was similarly firm. Prime Minister Carney dismissed Trump’s move as “very dumb” and slapped 25% tariffs on C$30B of U.S. goods—from everyday grocery staples to motorcycles. Ottawa threatened an even broader barrage if Washington’s new levies remain in force. Canada is also using every legal channel possible, pursuing WTO complaints and invoking the USMCA to challenge the legality of U.S. actions.
🇪🇺For its part, the EU faces a blanket 20% tariff, plus heavier hits on steel, aluminum, and autos. European leaders have responded by preparing a “mirror list” of U.S. products for retaliatory tariffs. Despite the heated rhetoric—calls of “unjustified” and “unprovoked”—EU officials are not acting purely out of indignation. Each countermeasure is strategic, targeting iconic American industries (think bourbon or Harley-Davidson) to pressure U.S. political constituencies.
Interestingly, beneath the EU’s tough talk lies a sense of nostalgia for a rules-based global trade order. But cracks are visible. Some member states, reeling from economic pressures, have grown more ambivalent about globalism. It’s telling that UK Prime Minister Keir Starmer openly declared, “Globalization is dead,” underscoring how mainstream that sentiment has become.
In short, retaliation from these major players is neither impulsive nor purely symbolic. Whether it’s China presenting itself as the “rule-abider,” Canada lining up economic counters, or the EU grappling with its own fragmentation, each move aims to reshape U.S. calculations—and strengthen the retaliators’ negotiating hand. The irony, of course, is that Washington once championed the very multilateral norms these nations now uphold.
NEGOTIATION STRATEGY
Not every nation has rushed to meet fire with fire. India, the UK, Japan, South Korea, Argentina, and Mexico have followed a more measured course—prioritizing talks, deals, and concessions over immediate tariff wars. Though their reasons and methods vary, they share one underlying logic: the world has changed, and they intend to secure favorable positions early rather than exhaust themselves in a prolonged standoff.
🇮🇳Take India. Despite facing a mid-range 26% U.S. tariff, it was spared the harsher rates levied on other emerging economies. Recognizing this window, New Delhi has held back on direct retaliation, opting instead to accelerate negotiations on a bilateral trade agreement. India aims to leverage its strategic importance—both as a market and a counterweight to China—to carve out carve-outs. If it manages to shield major exports and deepen economic ties with Washington, it could emerge from this tariff turbulence with minimal damage and some new trade privileges in tow.
🇬🇧The UK likewise rejected reflexive retaliation, even as it got slapped with a 10% baseline and steeper auto duties. In a striking admission, Prime Minister Starmer acknowledged Trump’s nationalist logic, stating that economic globalization “failed millions of voters” and that “we’re in a new era.” By adopting a pragmatic stance, London is gambling that a willingness to negotiate—while also bolstering domestic industry—will yield special considerations. Already, backchannel trade talks are under way, with the UK hoping to extract partial exemptions or reduce the sting on key British exports.
🇯🇵For Japan, staying in Washington’s good graces is paramount, given longstanding security ties. Tokyo has quietly reached out through multiple channels—especially top-level engagements at upcoming IMF-World Bank meetings. While Japan’s automakers reel from new duties, they are simultaneously announcing bigger U.S. investments to prove they are “part of the solution.” By helping reduce bilateral trade imbalances in ways Trump can tout, Japan aims to secure exemptions or at least temper the severity of future tariffs.
🇰🇷South Korea mirrors Japan’s approach: no hasty counter-tariffs, but robust behind-the-scenes negotiations. Seoul hopes that emphasizing its alliance with Washington and offering targeted concessions will shield key sectors like electronics and autos. Argentina is also leaning on bilateral dialogue, seeking carve-outs for crucial exports like beef, wine, and lithium by offering reforms that Washington wants. Meanwhile, Mexico, heavily dependent on the U.S. market, is treading carefully—delaying any direct reprisals while it pursues a partial resolution through extended USMCA frameworks and side deals involving border security commitments.
All these countries recognize that the post-tariff global order is less a stable structure and more a fluid, transactional reality in which bilateral pacts and political favor matter more than universal free-trade rules. By moving swiftly to negotiate rather than retaliate, they’re trying to shape outcomes in real time—before Washington finalizes any “winner” or “loser” lists. Their common strategy? Prove themselves indispensable partners, offer limited but politically useful concessions, and maintain open lines for ongoing dialogue. In this new era, that might be the surest way to minimize damage and possibly emerge with a competitive edge.
Not every nation has rushed to meet fire with fire. India, the UK, Japan, South Korea, Argentina, and Mexico have followed a more measured course—prioritizing talks, deals, and concessions over immediate tariff wars. Though their reasons and methods vary, they share one underlying logic: the world has changed, and they intend to secure favorable positions early rather than exhaust themselves in a prolonged standoff.
🇮🇳Take India. Despite facing a mid-range 26% U.S. tariff, it was spared the harsher rates levied on other emerging economies. Recognizing this window, New Delhi has held back on direct retaliation, opting instead to accelerate negotiations on a bilateral trade agreement. India aims to leverage its strategic importance—both as a market and a counterweight to China—to carve out carve-outs. If it manages to shield major exports and deepen economic ties with Washington, it could emerge from this tariff turbulence with minimal damage and some new trade privileges in tow.
🇬🇧The UK likewise rejected reflexive retaliation, even as it got slapped with a 10% baseline and steeper auto duties. In a striking admission, Prime Minister Starmer acknowledged Trump’s nationalist logic, stating that economic globalization “failed millions of voters” and that “we’re in a new era.” By adopting a pragmatic stance, London is gambling that a willingness to negotiate—while also bolstering domestic industry—will yield special considerations. Already, backchannel trade talks are under way, with the UK hoping to extract partial exemptions or reduce the sting on key British exports.
🇯🇵For Japan, staying in Washington’s good graces is paramount, given longstanding security ties. Tokyo has quietly reached out through multiple channels—especially top-level engagements at upcoming IMF-World Bank meetings. While Japan’s automakers reel from new duties, they are simultaneously announcing bigger U.S. investments to prove they are “part of the solution.” By helping reduce bilateral trade imbalances in ways Trump can tout, Japan aims to secure exemptions or at least temper the severity of future tariffs.
🇰🇷South Korea mirrors Japan’s approach: no hasty counter-tariffs, but robust behind-the-scenes negotiations. Seoul hopes that emphasizing its alliance with Washington and offering targeted concessions will shield key sectors like electronics and autos. Argentina is also leaning on bilateral dialogue, seeking carve-outs for crucial exports like beef, wine, and lithium by offering reforms that Washington wants. Meanwhile, Mexico, heavily dependent on the U.S. market, is treading carefully—delaying any direct reprisals while it pursues a partial resolution through extended USMCA frameworks and side deals involving border security commitments.
All these countries recognize that the post-tariff global order is less a stable structure and more a fluid, transactional reality in which bilateral pacts and political favor matter more than universal free-trade rules. By moving swiftly to negotiate rather than retaliate, they’re trying to shape outcomes in real time—before Washington finalizes any “winner” or “loser” lists. Their common strategy? Prove themselves indispensable partners, offer limited but politically useful concessions, and maintain open lines for ongoing dialogue. In this new era, that might be the surest way to minimize damage and possibly emerge with a competitive edge.
DEFENSIVE STRATEGY
A third cluster of countries—Taiwan, Japan, South Korea, and China (in its domestic policy dimension)—is pivoting toward a defensive posture, focused on cushioning economic pain rather than solely relying on retaliation or negotiation.
🇹🇼Taiwan exemplifies this approach. Hit by a hefty 32% tariff on most goods but relieved that semiconductors remain exempt, Taipei moved quickly to protect vulnerable exporters. President Lai Ching-te announced roughly US$2.7 billion in stimulus and relief programs, including subsidies and tax breaks, to ensure Taiwanese manufacturers don’t lose ground in the U.S. market. It’s a strategic choice: with limited leverage for direct confrontation, Taiwan aims to keep its industries afloat until a broader settlement emerges.
🇯🇵Japan also has “defensive” measures in the pipeline—particularly for sectors like autos that took a direct hit. Although Tokyo falls in the negotiation camp externally, it is quietly preparing a task force to offer supportive loans, tax incentives, or re-shoring assistance should tensions drag on. Meanwhile, corporate players like Nissan are already talking about relocating production to U.S. plants, partly to sidestep tariffs and partly to maintain market share.
🇰🇷South Korea’s central bank is on alert, signaling possible stimulus or monetary easing if the trade friction escalates. Electronics and auto exports are vital to Seoul’s economy, so it’s readying measures to cushion any fallout. And while China is broadly retaliating, it’s also fortifying its domestic front—consider the recent hints of fresh fiscal stimulus or expanded industrial subsidies to shield homegrown industries from the protracted volatility of a trade war.
This defensive strategy recognizes that the tariff battle may not resolve soon. Governments adopting it treat support packages, fiscal tools, and industrial policy as a buffer—enabling companies to weather tariff shocks without massive layoffs or bankruptcies. In essence, they’re creating an economic life raft for key sectors while keeping diplomatic options open for eventual negotiation or further retaliation. It’s less about short-term point-scoring and more about preserving long-term competitiveness in a highly uncertain trade environment.
A third cluster of countries—Taiwan, Japan, South Korea, and China (in its domestic policy dimension)—is pivoting toward a defensive posture, focused on cushioning economic pain rather than solely relying on retaliation or negotiation.
🇹🇼Taiwan exemplifies this approach. Hit by a hefty 32% tariff on most goods but relieved that semiconductors remain exempt, Taipei moved quickly to protect vulnerable exporters. President Lai Ching-te announced roughly US$2.7 billion in stimulus and relief programs, including subsidies and tax breaks, to ensure Taiwanese manufacturers don’t lose ground in the U.S. market. It’s a strategic choice: with limited leverage for direct confrontation, Taiwan aims to keep its industries afloat until a broader settlement emerges.
🇯🇵Japan also has “defensive” measures in the pipeline—particularly for sectors like autos that took a direct hit. Although Tokyo falls in the negotiation camp externally, it is quietly preparing a task force to offer supportive loans, tax incentives, or re-shoring assistance should tensions drag on. Meanwhile, corporate players like Nissan are already talking about relocating production to U.S. plants, partly to sidestep tariffs and partly to maintain market share.
🇰🇷South Korea’s central bank is on alert, signaling possible stimulus or monetary easing if the trade friction escalates. Electronics and auto exports are vital to Seoul’s economy, so it’s readying measures to cushion any fallout. And while China is broadly retaliating, it’s also fortifying its domestic front—consider the recent hints of fresh fiscal stimulus or expanded industrial subsidies to shield homegrown industries from the protracted volatility of a trade war.
This defensive strategy recognizes that the tariff battle may not resolve soon. Governments adopting it treat support packages, fiscal tools, and industrial policy as a buffer—enabling companies to weather tariff shocks without massive layoffs or bankruptcies. In essence, they’re creating an economic life raft for key sectors while keeping diplomatic options open for eventual negotiation or further retaliation. It’s less about short-term point-scoring and more about preserving long-term competitiveness in a highly uncertain trade environment.
Caveats of FTA offers
White House trade adviser Peter Navarro stresses that zero-tariff deals are inadequate without tackling hidden barriers like value-added taxes, strict food safety rules, and other non-tariff practices. Reciprocity and reshoring, or no deal.
White House trade adviser Peter Navarro stresses that zero-tariff deals are inadequate without tackling hidden barriers like value-added taxes, strict food safety rules, and other non-tariff practices. Reciprocity and reshoring, or no deal.
Secretary Bessent’s remark that the U.S. will engage “not just with countries, but with companies” signals a quiet revolution in tradecraft. It could upend decades of protocol and we’ll unpack this shift in the next strategy breakdown.
This wraps the survey of initial responses.
This wraps the survey of initial responses.
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