The way Trump has chosen to make new agreements for the benefit of the US with all countries and to make America great again, as he argues, is the most dangerous one anyone could imagine.
Not only for the rest of the world that is affected by American policy, but also for the US that is currently suffering a huge blow to its credibility.
The credibility of the US is being questioned, not only by its trading partners and international investors who hold its bonds, but also by the people who have placed their dreams in this country. The students from all over the world who study at American universities and who suddenly risk becoming unwanted. The scientists who teach at the best American universities and who are already looking for jobs outside the US, the workers who have already built a life there.
The blow to credibility is the worst thing that can happen to a country and, as things are going with Trump’s policies, at some point the collapse of trust in the US will be obvious and violent.
The rest of the world, leaders, businessmen, economists, cannot understand what the American president is seeking. Many doubt that he even has a plan. He himself states that he wants to make new agreements with everyone, in favor of the US. To do so, he has dissolved all alliances, canceled all partnerships, disrupted every concept of commercial and international law and caused terribly dangerous fluctuations in all markets.
In the stock markets, in the bond markets, in currency exchange rates, in the energy market, in freight rates and in international trade, everywhere. Trump has taken the risk that exists in every investment decision, in every business partnership, and even in every life decision, and made it incalculable. No one can now estimate what the risk will be if they make a transaction with the US, since no factor remains constant. With one statement, Trump overturns everything, even his own previous decisions. And of course, things under these circumstances become very dangerous for everyone.
Where and how will this story end? Trump is supposed to be waiting for everyone to come and beg him to forgive them and sign new agreements, with concessions in favor of the US. Some have already gone, including a delegation from the European Union, which found from the first contacts that the Americans are not clear – and they have not told them what they are asking for. European negotiators wondered whether the Americans’ demands were specific and felt that there was chaos regarding the American agenda. Thus, the first negotiations that were supposed to begin did not start well at all.
Perhaps Trump is waiting for the Chinese. A few days ago he said he believes a deal will be struck with China. So far, nothing of the sort is in sight, the only encouraging thing is that Chinese President Xi Jinping has said that everyone loses in this war and that there will be no winner. Let’s hope that Trump knows this too, because in this case we can hope that they will sit down at the negotiating table. Theoretically, the peak of tension to the point where everyone realizes that they will lose is often necessary for negotiations to begin.
We still don’t know when the US-China negotiations will begin, just as we don’t know what they will involve. Will it be limited to international trade between the two countries and the trade balance? Very unlikely.
If the Chinese and Americans sit down at the table, they have other much more important issues to agree on, for example the American bonds that the Chinese have, Taiwan, geopolitical balances, hot issues that could never be discussed and solutions found if the tension has not first reached a boiling point. And it is doubtful whether even under this tension they can be resolved.
In the meantime, in the process from the imposition of the first tariffs to the negotiations and their completion there will be enormous fluctuations in all markets. There will be catastrophic losses and of course some opportunities for profits. And the trust that is the basis for any kind of cooperation and transaction will be fundamentally shaken.
Was this the only way to reconsider the balances in world trade?
For some, yes. Perhaps some still believe that this plan was right. However, even for the all-powerful USA, this method does not seem to work, rather they themselves seem to be struggling more than others.
Why did Trump choose this negotiating practice? Why do other leaders not understand where he is going?
Perhaps because Trump, unlike everyone else, has negotiated several times as a businessman from the position of a bankrupt and sees things differently. All these questions are hanging around, but it is not very important to answer them at this point.
It is important that some negotiations begin, that the international community finds a way to reach an understanding with Trump and that the USA finds a way to disengage from this paranoid story and collect the losses, before it loses all trace of credibility. Because if credibility and trust in international transactions of all kinds, economic and political, are lost, things may spiral into other wars, much worse than the trade one.
