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Home » Trump’s ‘Liberation Day’ Tariffs Are Coming, but at a Cost to U.S. Alliances

Trump’s ‘Liberation Day’ Tariffs Are Coming, but at a Cost to U.S. Alliances

April 1, 20257 Mins Read Business
Trump’s ‘Liberation Day’ Tariffs Are Coming, but at a Cost to U.S. Alliances
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The incoming German chancellor, more convinced than ever that the defense and trade relationship with Washington is crumbling, has made plans to execute on his goal of “independence from the U.S.A.”

He’s not the only one.

The new Canadian prime minister said last week that “the old relationship we had with the United States” — the tightest of military and economic partnerships — is now “over.” Poland’s president is musing publicly about getting nuclear weapons. And the new leader of Greenland, host to American air bases since World War II, reacted to the uninvited visit of a high-level American delegation with indignation.

“President Trump says that the United States ‘will get Greenland,’” Prime Minister Jens-Frederik Nielsen said on social media. “Let me be clear: The United States will not get it. We do not belong to anyone else. We decide our own future.”

These are the results so far of President Trump’s threats to abandon NATO allies whose contributions he judges insufficient, his declaration that the European Union was designed “to screw” the United States and his efforts to expand the United States’ land mass. The main reaction is resistance all around. Now, into this maelstrom of threats, alienation and recriminations, President Trump is expected to announce his “Liberation Day” tariffs on Wednesday.

The details of the tariffs are still unclear, which is one reason the markets are so on edge. Political leaders are on edge as well, because Mr. Trump has made clear that the tariffs will fall on adversaries like China as well as nations that, until recently, were considered America’s closest defense and intelligence allies.

Trump administration officials do not dwell on the price that will be paid by consumers, nor on the effects that the inevitable retaliation will have on American farmers. But just as curiously, the administration has not described any cost-benefit analysis of the president’s actions, such as whether the revenue gained is worth the damage done to America’s central alliances.

Gone are the days when Mr. Trump merely threatened to pull troops out of nations like South Korea and Japan that run a trade surplus with the United States. Now, he wants them to pay up — for some kind of ill-defined mix of subsidies to their own industries, taxes on American goods, free-riding on American security and refusal of his expansionist demands.

Mr. Trump is already showing signs of concern that his targets may team up against him.

A few days ago, he posted a middle-of-the-night warning on social media to his closest allies that “if the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both.”

On Sunday China declared that its trade minister had agreed with Japan and South Korea — Washington’s two most powerful treaty allies in the Pacific — on a common response to Mr. Trump’s actions. In Seoul, the statement was described as an “exaggerated” version of a discussion about new supply chains. But Beijing clearly wanted to leave the impression that it can work with America’s allies if Washington will not.

Viewed one way, Mr. Trump’s “Liberation Day” is the logical extension of the goal he announced in his inaugural address. “Instead of taxing our citizens to enrich other countries,” he said, “we will tariff and tax foreign countries to enrich our citizens.” That suggests he does not intend the tariffs to be a negotiating tool. Instead, they are expected to be a permanent source of revenue and — if you believe officials like Commerce Secretary Howard Lutnick — “they are going to reduce the deficit and balance the budget.” He added: “Let the people who live off our economy pay, and we will pay less.”

Viewed less optimistically, the imposition of the tariffs may well kick out the last of the three pillars of the trans-Atlantic, trans-Pacific and Canadian alliances. The defense relationships, the trade interdependencies and the bond nurtured over 80 years in those regions have all been intertwined.

Those three strands were deliberately designed to be reinforcing. To Mr. Trump and his allies, though, they have been twisted to take advantage of the United States, a view made clear in the exchanges in the now-famous Signal chat made public last week. It drove home the fact that while President Trump is taking on all of America’s allies, he harbors a particular animus for Europe.

As they debated the timing and wisdom of a strike on the Houthis for their attacks on shipping, Vice President JD Vance wondered whether “we are making a mistake” since it is Europe and Egypt that are most dependent on moving ships through the Suez Canal. (In fact, China is among the biggest beneficiaries, but it was never mentioned.)

“I just hate bailing out Europe again,” he wrote, leading the defense secretary, Pete Hegseth, to respond, “I fully share your loathing of European free-loading. It’s PATHETIC.” They went on to discuss that, somehow, Europe would be made to pay for the cost of the operation — even though the European allies appear to have been kept in the dark about the planned attack.

“There needs to be some further economic gain extracted in return,” Stephen Miller, the deputy chief of staff in the White House, noted in the chat.

Ivo Daalder, a former U.S. ambassador to NATO, wrote recently that the clear conclusion other countries can reach from the chat is “apparently, the U.S. military is for hire, even if there has been no request for its services.”

“And if you want us — you have to pay,” he continued.

Somewhat remarkably, Mr. Trump’s national security officials are acting as if all is normal, as if their boss is not upending the system. On Thursday, a day after Mr. Trump is expected to announce the tariffs, Secretary of State Marco Rubio will represent the United States at a long-scheduled NATO meeting that will be heavily focused on the war in Ukraine.

He will have to navigate the resentments of fellow foreign ministers, most of whom argue, largely in private, that the United States is making a fundamental error by seeking to normalize relations with Russia — rather than contain it and punish it for invading Ukraine — and that it is seeking to hobble their economies. (Occasionally these leak out: Justin Trudeau, before he left office as prime minister of Canada, told a Canadian audience that Mr. Trump was attempting “a total collapse of the Canadian economy because that will make it easier to annex us”.)

The result is that the NATO nations are meeting regularly to discuss whether it is possible to design a peacekeeping or observer force to go into Ukraine, in the event that a cease-fire takes hold, without the United States. They are discussing whether Britain and France’s nuclear umbrella could extend over the other NATO allies, because the United States may no longer be relied upon. It is an erosion of trust that, just two-and-a-half months ago, seemed almost unthinkable.

Such discussions are prompting a long-overdue recognition by European nations that they will have to spend significantly more on defense, though it would probably take a decade or longer to replicate the capabilities the United States brings to the alliance. The downside is that should there be a world crisis in coming years, the United States may have to enter it without its greatest force-multiplier: its allies.

“In the 1950s the U.S. thought NATO was going to be one of many alliances,” Kori Schake, the director of foreign and defense Policy Studies at the American Enterprise Institute, said on Monday.

“The reason that NATO survived and prospered was because the common values and the trade relationship supported the security commitments,” Ms. Schake, a defense official in President George W. Bush’s first administration who writes extensively on the history of alliances, added.

“Who does President Trump think will help us when we need allied forces for operations critical to the security of the United States?” she asked. “And who is going to sympathize with Americans if there is another 9/11, given the behavior of the government of the United States?”

Customs (Tariff) Donald J European Union International Relations International Trade and World Market North Atlantic Treaty Organization Trump United States International Relations
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