This is indeed one of the most extraordinary examples of gaslighting during Trump’s presidency. In an attempt to spin one of the largest humiliations in U.S. history into a victory, he misrepresents the situation to the public.
The incident closely mirrors the 2022 Liz Truss debacle in the UK. Trump introduced a poorly conceived and executed policy that caused a market panic, including turmoil in the bond market. He had no choice but to retract it.
Unlike the UK system, which, for better or worse, can remove incompetent prime ministers, the U.S. remains stuck with Trump. He remains insulated by a circle of sycophants, like Lutnick, who try to reframe humiliating failures as “extraordinary” successes, while his supporters continue to interpret his biggest policy blunders as masterful political moves.
Even after his retreat, the U.S. is in a far worse position than before. Contrary to Trump’s and Lutnick’s claims, this episode proves beyond a doubt that the world is not ready to “work with President Trump to fix global trade.” Aside from Israel’s Netanyahu, not a single country has publicly supported his plan.
Several smaller nations, heavily reliant on trade, have reluctantly stepped forward to limit the damage to their economies, but calling this cooperation is pure fantasy. What is happening is global damage control, as countries caught in the fallout from his economic policies adjust their strategies to reduce their reliance on the U.S.
More importantly, countries that represent roughly 50% of U.S. trade—such as Canada, the EU, and China—have announced retaliatory tariffs. This contradicts Trump’s claim that no nations, aside from China, are retaliating against the U.S. and demonstrates how his policies have united geopolitical rivals against him.
It seems that Trump’s new approach is to focus solely on China, hoping to return to the U.S. strategy of attempting to get other nations to contain China. However, this strategy has no chance of succeeding for two key reasons.
Firstly, Trump’s recent actions have shown that he is fundamentally unstable and unreliable, and the U.S. is seen as a risk rather than a pillar of global trade. This chaotic governance signals to the world that America’s word holds no weight beyond the next social media post. The notion of relying solely on the U.S. for economic security is now more absurd than ever.
Secondly, the “deal” Trump is offering is not one that most nations would accept. The proposal suggests that these countries abandon or reduce their relationship with China—their largest trading partner—and replace it with a more strained relationship with the U.S., which includes additional tariffs. This is an unacceptable proposition, as it sacrifices economic sovereignty and strategic flexibility for minimal benefit.
Even smaller nations that might be temporarily appeased by Trump will eventually seek to distance themselves from U.S. influence as quickly as possible. This is not a strategic success but a desperate failure of an administration that failed to anticipate the global response to its economic coercion.
Trump may believe he is teaching the world a lesson, but he has only shown that America has become a major threat to global prosperity. As a result, countries will not “work with him” but will instead do everything they can to shield themselves from the instability he has created.
This will not be remembered as a moment of American strength, but as the time when the world realised that diversifying away from the U.S. market was not just economically prudent, but necessary for long-term security.
