On Thursday evening, as the workweek came to a close at a textiles factory near Ho Chi Minh City, Nguyēn Thị Diẹu and her husband tuned in to the news. At a distance of more than 8,700 miles, US President Donald Trump unveiled sweeping, unprecedented tariffs affecting every nation globally. No place was exempt, not even the deserted Heard Island and McDonald Islands off Australia’s western coast, which inexplicably faced a 10% tariff.
This declaration ignited a fierce global trade war, leading to a significant downturn in global markets, including Trump’s beloved Wall Street, where hundreds of billions of dollars in stock value vanished.
For Diẹu and her spouse, this could translate to losing their jobs. Employed by a Taiwanese firm producing footwear in Vietnam for an American company that exports these products worldwide, they epitomize modern globalization. With the US shifting towards a new wave of protectionism, a speech delivered in the White House Rose Garden now leaves Diẹu uncertain about her family’s chance of survival.
“Nothing is clear,” Diẹu remarked on Saturday night while perusing a roadside market nestled in Ho Chi Minh City’s industrial zones, which house thousands of factory workers. “I feel confused and anxious about the stability of my job.”
Vietnam’s officials share her concerns. The US is Vietnam’s largest market, with exports constituting 30% of the nation’s GDP, driving economic growth. Within hours of the announcement, the prime minister of Vietnam called for a “rapid response team” and announced that Deputy Prime Minister Ho Duc Phoc would be heading to the US for a “working visit”.
Workers at a garment factory in Vietnam, where Trump’s tariffs are anticipated to severely disrupt business. Photograph: Huu Kha/AFP/Getty Images
Reactions around the globe mirrored that of Vietnam. In Europe, leaders harshly criticized Trump’s tariffs as “fundamentally wrong” (Olaf Scholz), “brutal and unfounded” (Emmanuel Macron), and “contrary to the interests of millions on both sides of the Atlantic” (Pedro Sánchez).
European media echoed this sentiment. Le Monde described the announcement as being “filled with paranoia, vengeance, and coerciveness,” while Italy’s Corriere della Sera urged the EU to consider “counter-tariffs… to bring the US back to negotiations”. The EU finds itself in a significant stress test and must demonstrate unity.
Although European Commission chief Ursula von der Leyen articulated a sense of disappointment felt by Europeans towards their oldest ally, warning the tariffs represented “a major blow to the world economy” with “serious repercussions,” the EU hesitated in its immediate response.
This restraint may stem from a desire to avoid escalating tensions. Mujtaba Rahman from the Eurasia Group consultancy noted that the EU’s “ultimate aim is to avert further escalation, encourage the US to return to the negotiation table, and seek mutually beneficial paths to reducing transatlantic trade barriers.”
Brussels remains hopeful that a combination of countermeasures, threats, and offers in the upcoming weeks will yield positive results, as they prepare to mitigate damage to a EU-US trade relationship valued at over €1.6tn (£1.3tn) in 2023.
Europe risks significant losses if it fails to act. Trump’s “liberation day” tariff of 20% on nearly all EU exports to the US follows previous 25% tariffs on steel, aluminum, cars, and car parts. In total, approximately 70%—or €380bn—of EU exports to the US would be impacted.
EU officials project that these tariffs could generate about €80bn for the US treasury if trade patterns remain unchanged, which is unlikely; economists suggest EU exports to the US could plummet by 50% due to the tariffs over the medium term.
However, if Brussels hopes that a methodical approach to retaliation will motivate the US to negotiate, there’s the complexity of aligning the interests of 27 member states, each with individual priorities.
The EU’s response to Trump’s earlier steel and aluminum tariffs, announced six weeks prior, is expected to encompass duties on iconic American products such as orange juice, blue jeans, bourbon whiskey, and Harley-Davidson motorcycles.
Scheduled for unveiling in mid-April, the specifics are still being finalized. Even less clear is the bloc’s counter-response to the 25% tariffs on EU cars and parts that took effect on 3 April, let alone the latest liberation day tariffs.
Member states harbor apprehensions. Nations like France, Italy, and Ireland are actively advocating for bourbon to be excluded from the list, fearing Trump’s threat of imposing a 200% duty on European wines and spirits should the EU proceed.
They reason that targeting American whiskey could lead to more economic harm than benefit, noting that the EU imports barely €500m of bourbon annually but exports €8bn of wine and spirits to the US, with some EU vintners depending on the US for up to 20% of their sales.
“What matters,” stated Ignacio García Bercero, a former senior EU trade negotiator, “is maximizing political impact on the US while minimizing economic effects on the EU.” It’s a careful balancing act.
However, the EU holds a powerful card in the realm of services. Despite Trump’s fixation on the $236bn trade deficit in goods with the EU, it’s lesser known that the US maintains a trade surplus of €109bn in services with the EU.
Should it become necessary, restricting American companies’ access to EU public procurement opportunities or financial services could serve as a potent response. For now, such measures haven’t been executed.
“We are creating room for negotiation and assessing how to strategically execute our response effectively,” remarked an EU official, stressing the importance of impacting the US while protecting member states and industries from unnecessary hardship.
As Europe grappled with the shock of the tariffs, an unspoken sentiment echoed from Beijing: welcome to our world. “There are no victors in trade wars, and there is no escape from protectionism,” stated the commerce ministry on Thursday.
In contrast to the EU’s hesitance, China’s government wasted no time retaliating. On Friday, it declared a 34% tariff on US imports, set to commence on 10 April, alongside adding US entities to its export control list, thereby restricting their operational capabilities in China.
Since the onset of Trump’s first trade war with China in 2018, Chinese firms have been strategizing to sidestep his tariffs by relocating supply chains to Southeast Asia. Concurrently, the Chinese government has been forming trade agreements with countries in the global south with increasing zeal.
Even with nations lacking a free trade agreement, such as Brazil, bilateral trade has surged in the past seven years, reaching a record $157.5bn in 2023.
Economists observed that the US tariffs on Chinese goods did not alter the fact that the US remains a net importer of items produced by China, including fast fashion, electronics, and clean energy technology. “If the US modifies its importing patterns without changing its net imports, it won’t significantly impact the global landscape,” explained Michael Pettis, finance professor at Peking University. “Trade flows may shift, but the fundamental disparities will persist.”
Trump and his team have attempted to address this issue by placing tariffs on countries utilized by Chinese businesses to reroute their supply chains, targeting Vietnam, Thailand, and Cambodia with even steeper tariffs of 46%, 36%, and 49% respectively.
Regardless of whether these tariffs achieve their intended goals from the US perspective, one undeniable strategic success has emerged for China; it can once again position itself as a stable global partner for third-party nations, contrasting its inconsistent US counterpart.
In Washington, Trump proclaimed on social platforms that “China played it wrong – they panicked,” even as he maintained that, despite market declines and international condemnation—including rare backlash from his own Republican Party—his tariffs had made it a “great time to get rich”.
Nervousness permeated the markets on the approach of Monday, as fears grew that disastrous downturns might persist. Recession concerns intensified in America, with JP Morgan analysts recently raising the likelihood of a global recession to 60% and citizens preparing for a resurgence of inflation, a factor that significantly contributed to the downfall of Trump’s predecessor, Joe Biden.
Panic rippled through the streets of New York as well. In Washington Square Park, two sisters from Detroit settled on a bench amid blooming magnolia trees. Kathleen, a primary school educator, expressed her concern over the absence of a coherent plan prior to implementing these changes.
“I want to be optimistic, yet I feel enveloped in a cloud of worry with this administration,” Kathleen lamented. “I fear for the leadership, the discontinuity within it, and the multitude of changes all at once without a clear strategy.”
Her sister, Elizabeth, conveyed her own anxiety, mentioning she had distanced herself from the news. “Our mom has experienced a significant spike in anxiety this past week regarding her investments. She’s worked tirelessly for those, and they contribute to her daily sense of security—a retired schoolteacher, and the drop in stocks profoundly affects her.”
Trump’s actions stem from his aspiration to revive American manufacturing, convinced that tariffs will bring jobs back to the US, though most economists believe this is highly improbable.
Interestingly, for such an impactful decision that has unsettled the global economy, Trump reportedly made his choice just moments before the public announcement. According to the Washington Post, he had not finalized any specific plan until merely three hours before taking the stage in the Rose Garden.
The “liberation day” address was orchestrated, receiving enthusiastic applause from an audience composed mainly of cabinet members and blue-collar workers from industries long afflicted by foreign competition. He painted a picture suggesting that tariffs would resurrect an archaic American economy, restore factories, and return prosperity to everyday workers.
“Taxpayers have been ripped off for over 50 years,” complained Trump, “but that will no longer occur.”
Vice President JD Vance commented, “We’ve witnessed factory closures, rising inflation, and housing costs soaring so high that most Americans can no longer afford to purchase homes. President Trump is steering this economy in a new direction.”
Most analysts would likely agree that the US economy is indeed heading in a “new direction,” albeit with less enthusiasm than that expressed by the vice president.
On Friday, Jerome Powell, the chair of the Federal Reserve, cautioned that Trump’s actions could provoke even higher inflation and impede growth. “It is becoming evident that the tariff increases will significantly surpass expectations,” he warned. “The same can likely be said for the economic consequences, which will include heightened inflation and sluggish growth.”
While financial markets trembled on Friday, the Washington Post reported that Trump remained undeterred by adverse headlines and international criticism, determined to heed a singular voice in pursuit of what he perceives as his political legacy—his own.
“He’s reached a point of not caring anymore,” a White House official privy to Trump’s mindset disclosed to the newspaper. “Negative press? He couldn’t care less. He’s going to follow through on what he promised during his campaign.”
Nevertheless, even some former officials within Trump’s economic circle have privately expressed skepticism over the feasibility of returning the US to an era of manufacturing independence.
Author Michael Wolff, renowned for his four books on Trump in power, suggests the president is likely keenly attuned to how his disruptions to global trade norms are being received, receiving updates and feedback from aides. Wolff posits that Trump is caught between two conflicting instincts.
“It’s advantageous for him—he’s once again dominating the headlines. No one is discussing anything else but tariffs. Suddenly, tariffs, an esoteric facet of trade policy, have transformed into the most significant issue, filled with elements of reality TV. He’ll undoubtedly be pleased by that.”
Conversely, Wolff anticipates Trump will closely monitor the financial markets. “He’ll receive calls from business leaders questioning his actions. I’m sure he hasn’t reached any firm conclusion. So, on one hand, it’s fantastic—he’s the world’s most talked-about figure again. Yet, on the other, everything could collapse around him.”
And therein lies the essence of Trump. “He is intrinsically self-destructive, yet that same impulse keeps him prominently in the news.”
Back in Vietnam, Trump’s reputation as a successful businessman resonates with many in the country, where entrepreneurship is highly regarded. Numerous translations of his books, including The Art of the Deal, are available in Vietnamese. During his first term, many Vietnamese celebrated his hardline stance on China, with polls indicating he garnered confidence from a considerable portion of the population.
“I watch him all the time on TV,” Diẹu shared, adding that she holds a favorable view of him. Would her opinion change following his tariff announcement? There’s a moment of silence. “It’s hard to say.”
