David Vance SubstackRead More
It’s been an interesting 48 hours as the world stock markets react to the Trump tariffs! Predictably, they initially plunged – the media gloated, but then they rose up – the media went silent. Yesterday was a good BUYING opportunity for the shrewd stock investor. We also saw the rush by as many as 70 more enlightened nations to the White House to try and cut a deal, which may lead to reduced or zero tariffs!
But there are two trading blocs which will resist – China and the EU.
Let’s discuss them.
China and the European Union seem poised to entirely misjudge the moment, clinging to stubborn pride, arrogance or misguided strategy. I think that their refusal to cut a quick deal with Trump on tariffs will expose their bureaucratic inertia, leaving them economically disadvantaged while others seize the opportunity to align with America’s new Trumpian direction.
People really need to grasp that Trump’s approach to tariffs is not a reckless gamble; it’s a calculated masterstroke. During his first term, he also wielded tariffs, targeting strategic sectors to protect American jobs and force fairer trade terms. The results spoke for themselves: billions flowed back into the U.S. economy, manufacturing saw a resurgence and adversaries like China were forced to the table. That’s what actually happened during those years although the media don’t want to talk about it!
Now, with an even stronger mandate, Trump 2.0 is set to double down. Nations that recognise this—think Vietnam , South Korea, maybe even a post-Brexit UK—will rush to strike deals, avoiding the sting of steep tariffs and securing access to the world’s most lucrative market. China and the EU, however, risk missing the boat entirely.
China’s reluctance stems from a toxic mix of hubris and miscalculation. Beijing believes it can outlast Trump, leaning on its state-controlled economy and long-term ambitions to dominate global supply chains. But this ignores the reality of Trump’s resolve. He’s already shown he can hit China where it hurts—think of the $250 billion in tariffs imposed during his first term, which rattled their export-driven model. A quick deal now could mitigate the damage, perhaps trading concessions on intellectual property theft or currency manipulation for softer tariff rates. Instead, Xi Jinping’s regime seems intent on a p*ssing contest, betting on resilience while Trump prepares to escalate. The result? American consumers will shift to alternatives, and China’s economy—already strained—will bleed further. China CANNOT win. Trump wins, America wins, and China’s obstinance becomes its own undoing.
The EU, meanwhile, is trapped by its own bureaucratic inertia and sanctimonious posturing. Despite being a protectionist trading bloc, Brussels loves to lecture about free trade, but its leaders fail to grasp Trump’s pragmatic genius. He’s not anti-trade; he’s anti-losing. The EU’s $150 billion trade surplus with the U.S. is a glaring target, and Trump has already signalled that he’ll slap 25% tariffs on European cars and luxury goods to level the playing field. A smart EU would negotiate early—offering, say, reduced agricultural barriers or NATO funding commitments in exchange for tariff relief. Instead, they dither, paralysed by 27 member states bickering over priorities. Von Der Leyen exemplified this yesterday by offering the US zero tariffs on “Industrial Goods” whilst threatening 25% tariffs on certain goods by 16th May. This won’t work!
Within the EU, we have German car manufacturers, French wine producers and Irish based Pharmaceuticals all facing a cliff edge but incapable of negotiating what is best for THEIR specific interests, it is the Bloc that matters!
Other nations see the writing on the wall. India, for instance, may well pivot from its own protectionist instincts and cut a trade deal, gaining favour with Trump while sidestepping punitive measures. Even Mexico and Canada, burned by USMCA negotiations, should know better than to test Trump’s patience again.
But China and the EU? They’ll cling to their outdated playbooks, underestimating a man who thrives on disruption. Trump’s tariffs aren’t just policy—they’re leverage, and he wields it like no one else. That is the genius of Trump.
In the end, China and the EU’s refusal to deal swiftly will cost them. Trump’s America First agenda will march forward, rewarding allies who adapt and punishing those who don’t. The world’s savviest leaders will shake his hand and sign on the dotted line. Beijing and Brussels, blinded by arrogance, will be left in the dust.
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