Do you remember the hysteria following Trump's tariff threats immediately after he returned to the White House in January? Oh, the terrible Orange Man would trigger a global trade war as other countries respond with tit-for-tat levies, bringing us back to the dark era of 1930s depression.
Here's the WTO chief expressing her fears at the time:
And here's The Guardian, quoting some "analysts":
Six months later not only has no catastrophe happened but barely anybody even dared to try and impose any retaliatory measures.
With the exception of China only EU signalled that it might fight back, but it quickly folded fearing prolonged uncertainty that European businesses considered worse than haggling over a few extra percentage points.
As I observed in a Facebook post in February nobody can win any battle on trade with America, because the odds are so stacked in its favour that only armchair intellectuals, who have never worked in any business, could deceive themselves that they aren't.
Out of all major countries the US boasts the lowest share of trade in GDP, while still being the world's leading buyer of imported goods at over $4.1 trillion annually.
This means that in a tit-for-tat fight it has the least to lose, because its exports are responsible for barely 11% of its GDP, while its trading partners have nowhere to go to sell their merchandise to.
When push came to shove even EU bureaucrats understood their weak position, especially as local economic growth is sagging and the continent has economically fallen behind America in the past 15 years.
Political fragmentation of the block doesn't help, of course, since there is no single strong counterpart who could stand up to Trump.
Knowing that it could, at most, hope for a blanket 10% levy – albeit after lengthy haggling – the EU has taken the 15% rate to cut the problem quickly, and committed to buying hundreds of billions of dollars worth of oil and gas (which is strategically sound anyway, as it needs to wean itself of Russian supplies).
Trump World Order takes shape
When Trump announced his 90-day deadline for countries around the world to negotiate individual trade deals with the US, the "experts" said it would be impossible as such agreements take many months or years.
And yet all Trump did was to extend the deadline from July 9 to August 1, and it seems that most are going to make it, as they are scrambling to make last minute offers and adjustments.
The only holdout is China, but the White House is willing to extend the temporary truce to negotiate the details, given the ongoing rivalry between the two superpowers. For Beijing it's not only a question of money but face as well, and it is more capable of enduring pain if it makes it look good in the eyes of its people.
But with the UK, Japan, EU and a few others, the rest are less meaningful and are likely to be sealed more quickly – or simply stay at the levels imposed by Trump who might not be interested in specifics of trade with Burkina Faso or Vanuatu.
Within mere six months Trump has managed to impose a new order on countries around the world. Instead of a trade war we have a procession of global leaders paying tribute to the US president, hoping he turns out to be more generous than expected.
This includes Europe which has long taken advantage of the lopsided Atlantic relationship and finally received a bill for it.
Given the ongoing war in Ukraine and the continent's dependence on the US for security, Europeans really had no cards vs. Trump, who had multiple ways to punish them if they didn't play ball.
What eggheads hysterically predicted would be a devastating global trade war ended up being a swift global capitulation.
