‘Liberation Day” represents a tragic absurdity rooted in a perplexing misinterpretation of reality. Contrary to Trump’s assertions that the world has been exploiting the US through rampant pillaging, the opposite is true. The tariffs he has implemented, the highest seen in a century, reflect this misunderstanding.
There is no “national emergency” in America. The US maintains a steady share of 25% of global GDP, unchanged since 1980. Notably, over half of its imports stem from affiliates of American multinational corporations, paid in dollars, which indicates that its trade deficit is more an accounting issue with itself than a sign of economic frailty.
The richest and most vibrant economy in the world has greatly benefited from a global economic order it established, one built on rules governing open trade in goods and services conducted in dollars. The US’s so-called goods deficit obscures the economic power that allows it to be the premier exporter of services in fields like banking, consultancy, media, and IT. In pursuing its self-interest, the US has been so aggressive that its partners, particularly the UK, have often become subordinate states rather than equal allies. Instead of plundering British tech assets, it is the US that has taken the UK’s technological treasures.
Nonetheless, the global landscape has improved, with countries in Asia significantly reducing poverty over the last 50 years. While certain American manufacturing towns in the Rust Belt have struggled, leaving their working-class residents in precarious situations—and despite the lack of sufficient protection from weakened trade unions—the rest of the US has prospered, albeit marred by stark inequalities that public policy has failed to address.
All of this has been disrupted by Trump’s economic ideologies, which dismiss the notion that trade can be mutually beneficial, fostering growth and opportunity. His perspective limits the understanding that one country imports goods and services from another because it cannot produce them as efficiently or at a comparable price, while also exporting its own goods for the same reasons. This viewpoint leads to the simple but misguided arithmetic of viewing trade deficits as evidence of exploitation. Trump’s solution aims to rectify this “wrong,” resulting in a wealthy nation imposing heavy tariffs on poorer countries, thereby undermining the flawed yet functional global system that has benefitted the US and the world.
For instance, trade in impoverished Lesotho has resulted in a 50% tariff due to its surplus from diamond exports. Meanwhile, Britain’s “low” 10% tariff—equivalent to Iran’s—reflects a trade deficit on US terms. Israel, regarded as a close ally of the US, found itself subjected to a 17% tariff due to its surplus. Brexit alleviated Britain from the 20% tariff imposed by the EU, but this “relief” stems from the trade weaknesses exacerbated by leaving the bloc. The UK has lost at least 5% of GDP from this decision; Trump’s tariffs could further cost up to 1% or more, according to the National Institute of Economic and Social Research—especially as we potentially face a full-scale trade war following China’s recent retaliatory tariffs. Moreover, the risk of an American recession looms. In his insightful work The Great Crash, 1929, JK Galbraith noted that a combination of self-perpetuating stock market collapse, crippling tariffs, faltering financial institutions, severe income inequality, economic ignorance, and diminished public trust in economic leadership were key contributors to the Great Depression. He expressed doubt that such calamities would occur anew, yet acknowledged that ignorance, greed, and the pitfalls of American capitalism posed a continual risk. Here we are in 2025, revisiting these very mistakes, with Britain uniquely vulnerable as an open economy outside major trade frameworks.
So, what actions should be taken? What not to do is to accept Trump’s framework of striving for a “deal” through damaging, unethical compromises on food import standards, the regulation of digital platform content, and our sovereign right to tax. A symmetric, fair agreement is in the national interest, yet under Trump’s trade ideology, such a deal may be nearly impossible.
Instead, Britain should ally with the G7 (excluding the US) and the EU—ultimately reaching out to Asia—to uphold a rules-based, open global trading and financial system. In this context, if confirmed as Canadian Prime Minister in the upcoming April elections, Mark Carney will play a crucial role. As a well-connected leader, he embodies the blend of Keynesian insights and political capability needed to drive necessary transformations. Carney’s strategy to counter Trump’s aggressive threats is to pivot Canada toward forging a new global trade order, where Britain can play a significant part.
The first step should be to establish Canada as a privileged trade partner with the EU without delay, an initiative that both France and Germany—with their incoming Chancellor Friedrich Merz, who recognizes the approaching changes—would likely support. The following step, to be jointly brokered by Britain and Canada, would involve extending this relationship to a newly relevant Commonwealth, including African nations like Nigeria and South Africa, as well as Asian countries such as India, Malaysia, Australia, and New Zealand—while keeping Japan and South Korea informed. The goal would be to harmonize trade tariffs and access regulations, along with implementing robust reciprocal sanctions on selected US service exports and a collective approach to address monopolistic digital platforms in the US, particularly Musk’s X, which the EU is already eyeing for scrutiny. If a more agreeable US emerges willing to participate in this trading structure, it would be welcomed back. Meanwhile, European nations should enhance their collaborative defense initiatives and continue supporting Ukraine. Britain can be a vital contributor to these efforts, necessitating the implementation of a defense levy to substantially boost military spending and supercharge public investment to counter recession.
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Trump’s America has lost global trust. The world now has alternatives to paying homage to him and his allies, who currently govern what was once a great nation primarily for their own enrichment. Keir Starmer continues to insist that he does not want or need to choose a side. But is it better to side with the mobster, or to build something new that benefits Britain, the whole world, and perhaps even a rejuvenated US? The choice exists and it is in the national interest to embrace it.
