The same dictum goes for trade wars. It’s okay to fight a one-front war, but not a war with the whole world. As comedian Norm Macdonald joked on The Late Show in 2015, “In the early part of the previous century, Germany decided to go to war, and who did they go to war with? The world … Then about 30 years pass and Germany decides, again, to go to war. And, again, it chooses as its enemy the world!”

The German high command learned a key lesson after losing World War I: Never fight a two-front war. That’s why Germany signed the 1939 Molotov-Ribbentrop pact with the Soviet Union, which stated that neither country would attack the other for a decade. But Adolf Hitler couldn’t count to 10, and Germany ended up in World War II—another two-front war that ended badly for Germany.

The German high command learned a key lesson after losing World War I: Never fight a two-front war. That’s why Germany signed the 1939 Molotov-Ribbentrop pact with the Soviet Union, which stated that neither country would attack the other for a decade. But Adolf Hitler couldn’t count to 10, and Germany ended up in World War II—another two-front war that ended badly for Germany.

The same dictum goes for trade wars. It’s okay to fight a one-front war, but not a war with the whole world. As comedian Norm Macdonald joked on The Late Show in 2015, “In the early part of the previous century, Germany decided to go to war, and who did they go to war with? The world … Then about 30 years pass and Germany decides, again, to go to war. And, again, it chooses as its enemy the world!”

Now, U.S. President Donald Trump has decided to start a trade war, and who does he choose to attack? The world. On his so-called “Liberation Day” in April, Trump imposed tariffs on most countries, even islands with penguins and allies that run trade deficits with the United States.

The result is that the rest of the world appears to resent the United States now and is beginning to plan for a post-American trading system. Japan, South Korea, China, and members of the Association of Southeast Asian Nations are in talks to cooperate on trade, as are the European Union and China. Canada is also looking to the EU for closer trade and investment ties in light of Trump’s tariffs.

Regardless, Trump seems to think that the United States is still the top dog, the head honcho, the boss. But it’s time to face the facts: The United States will lose massively from his trade war.

The reason is simple. Too many U.S. companies, especially in advanced industries, need global market access to survive and thrive. The model Trump company is a low to moderate tech and nontraded American company selling almost all its output domestically. Think kitchen knife makers, furniture producers, and golf club companies. (Does Trump know that he and his fellow country club members will soon pay more for a new set of irons?) If Trump protects these companies from overseas competition, his thinking goes, these companies will thrive. How could they not with a large protected market?

Not so fast. The United States cannot be powerful without robust advanced industries. And those industries will seriously struggle in Trump’s new world.

There are multiple vectors of challenge. The first is that U.S. firms that produce for export—think Boeing, Merck, General Electric, and others—will see their input costs increase significantly as they pay tariffs on imported components and materials.

Second, as other nations enact reciprocal tariffs, these companies’ products will be priced out of foreign markets. Companies in other countries will buy South Korean memory chips rather than those manufactured by Micron. Airbus jets, not Boeing. Hitachi machinery, not Caterpillar. You get the idea.

On top of that, Trump is opening the floodgates for blatant discrimination against U.S. firms. The EU is using Trump’s aggression to justify its “EuroStack”: a plan to eventually replace almost all U.S. tech products, from computer chips to severs, with those made in Europe. And while the bloc has finally announced plans to boost military spending, it will do so by purchasing European-made weapons.

This gets to a related challenge. While U.S. exporters under Trump’s trade war will be increasingly shut out of foreign markets, their competitors will find themselves in a globally integrated market, albeit sans the United States. That will be particularly true as other nations take steps to create more integrated markets through new trade agreements. Foreign companies will have the scale needed to innovate and thrive. By contrast, U.S. producers, dependent on the relatively smaller U.S. market, will slowly shrivel and perhaps ultimately die.

Trump’s import substitution strategy (ISI) has been tried elsewhere before. It failed. The international development community widely embraced ISI in the 1950s and ’60s as a growth strategy—and many developing nations held onto it until the 1980s and beyond. One reason it failed was that countries, even relatively large ones like Brazil, did not have big enough markets to efficiently make increasingly complex goods. A recent analysis of global industrial policies by the International Monetary Fund found that it was nations that adopted export strategies, such as South Korea and Taiwan, that thrived—not those that championed ISI.

Even though the U.S. economy is much bigger than, say, South Korea’s, today’s advanced industries require larger markets than the United States can provide to survive—if only to generate the revenues needed to pay for continuous research and development.

But there’s more. As the United States’ role as the global trade hegemon wanes, China will surely take its place. Beijing has spent the last 15 years penetrating every global institution. With Trump leading the U.S. exit from many of them—such as the World Health Organization, the Paris Agreement, and the United Nations Human Rights Council—victory is China’s.

We are already seeing, and will likely continue to see, vastly more countries traveling to Beijing and kowtowing to Chinese President Xi Jinping to cut trade deals. Brazil and Colombia, once the largest recipient of U.S. economic assistance in South America, have already gone down that road. Chinese advanced industries may not have U.S. market access after the trade war, but they will have the rest of the world’s. American companies, meanwhile, will be left with the scraps of the U.S. market.

After Trump’s drawdown of foreign aid, China is also spending much more than the United States to win the hearts and minds of other countries. It doesn’t take a weather person to know which way the wind blows: east. As Xi recently wrote in an article for a Russian newspaper, “unilateralism, hegemony and acts of bullying are inflicting severe harm” around the world. Only Trump could make China look like the defender of free trade and solidarity.

To be clear, Trump needed to go to (trade) war with nations not playing fair. The top offender is China, which started the global trade war around 2006 and has ramped it up since Xi took office. Along with some other countries, Beijing has engaged in systemic mercantilist practices, helping to hollow out U.S. manufacturing and leading to massive U.S. trade deficits.

China conducted massive intellectual property theft. It bludgeoned foreign firms, forcing them to produce in China and transfer technology. Then, it closed its markets once it gained production capabilities in a particular industry.

U.S. attempts to address China’s cheating through the World Trade Organization (WTO) have been few and far between, in part because the WTO is structured in ways that make effectively prosecuting such actions nearly impossible. U.S. firms also largely refused to cooperate with the WTO for fear of Chinese government retribution. The same goes for the EU.

The relatively few cases the United States brought and won provided mostly pyrrhic victories, such as quotas for rare-earth exports and wind power subsidies, neither of which changed competitive realities. And in most cases, China filed counter suits to U.S. suits. Trump was right: It was time to declare war. But not, as Macdonald would say, on the world all at once.

So, is there any hope? Probably not. But if Trump is one thing, it is unpredictable.

Here’s what Trump should have done: first focus on a few of the worst offenders of global trading rules, such as Vietnam, Indonesia, and India. Before imposing tariffs, invite those countries to talk, list key U.S. demands, and give them 90 days to fix them. Only impose tariffs if they refuse to respond. And while doing that, focus on the trade barriers and irritants that are most important to U.S. competitiveness in advanced industries.

If these nations want to expand their shrimp exports, then who cares? If they want to close their markets to U.S. whiskey, that’s not worth fighting about. But attacking U.S. tech firms and limiting access to advanced U.S. goods and services—that’s worth going to the mattresses over.

Then, pivot to Europe. After that, pivot to Japan, South Korea, and Taiwan. You get the picture. But don’t go to war with the whole world at the same time. All that does is create a worldwide anti-American alliance.

When China conducts its trade wars, it has enough sense to not attack every country all at once. Beijing launches a trade strike on a particular nation and then waits for a bit, gauging the foreign response; when outrage has died down, it launches another. And like a frog in boiling water, other nations have taken China’s blows with barely a whimper.

China remains the only country with the will and the means to destroy U.S.—and Western—advanced technology industries. Trump’s trade war should be designed to keep Beijing from winning. Above all, that means working with U.S. allies. But in the face of the United States’ increasing hostility and declining power, many nations find it easier to cut deals with Beijing.

Without allies, any war is lost. Unless Trump shows a willingness to negotiate with U.S. allies—something he refused to do when he met with Canadian Prime Minister Mark Carney in May—the United States will be just as globally isolated as it was before World War I. However, the big difference between then and now is that technology requires U.S. firms to attain global scale to survive and that China has emerged to outcompete them.

We can only hope that the United States emerges from its own multifront conflict better than Germany did.

Trump tariffs can stay in place for now, appeals court rules

30 May 2025 Share Save Natalie Sherman BBC News Share Save

Watch: “We will win this battle in court” – White House on tariff ruling

US President Donald Trump can keep collecting import taxes for now, an appeals court has said, a day after a trade ruling found the bulk of his global tariffs to be illegal. A federal appeals court granted a bid from the White House to temporarily suspend the lower court’s order, which ruled that Trump had overstepped his power by imposing the duties. Wednesday’s judgement from the US Court of International Trade drew the ire of Trump officials, who called it an example of judicial overreach. Small businesses and a group of states had challenged the measures, which are at the heart of Trump’s agenda and have shaken up the world economic order.

In its appeal, the Trump administration said the decision issued by the trade court a day earlier had improperly second-guessed the president and threatened to unravel months of hard-fought trade negotiations. “The political branches, not courts, make foreign policy and chart economic policy,” it said in the filing. Shortly before Thursday’s tariff reprieve from the appeals court, White House spokesperson Karoline Leavitt told a press briefing: “America cannot function if President Trump, or any other president, for that matter, has their sensitive diplomatic or trade negotiations railroaded by activist judges.”

Watch: Trump tariff agenda “alive and well”, says Trump adviser Peter Navarro

Trump blasted the lower court ruling on Thursday in a social media post, writing: “Hopefully, the Supreme Court will reverse this horrible, Country threatening decision, QUICKLY and DECISIVELY.” Wednesday’s decision by the little-known trade court in New York would void tariffs imposed by Trump in February on goods from China, Mexico and Canada, which he justified as a move intended to address a fentanyl smuggling. The lower court’s decision would also dismiss a blanket 10% import tax that Trump unveiled last month on goods from countries around the world, together with higher so-called reciprocal tariffs on trade partners, including the EU and China. The 1977 law Trump invoked to impose many of the tariffs, the International Emergency Economic Powers Act, did not allow for such sweeping levies without input from Congress, the lower court said. But its ruling did not affect Trump’s tariffs on cars, steel and aluminium, which were implemented under another law. The White House has suspended or revised many of its duties while trade negotiations grind on. But the appeals court decision allow the tariffs to be used for now while the case is litigated. The next hearing is on 5 June. On Thursday, another federal court overseeing a separate tariffs case reached a similar conclusion to the trade court. Judge Rudolph Contreras found the duties went beyond the president’s authority, but his ruling only applied to a toy company in the case.

Watch: Trump slams “Taco” acronym given to tariff flip-flops

What happens next?

Trump trade adviser Peter Navarro told reporters on Thursday: “You can assume that even if we lose [in court], we will do it [tariffs] another way.” No court has struck down tariffs on cars, steel and aluminium that Trump imposed citing national-security concerns under Section 232 of the Trade Expansion Act of 1962. He could expand import taxes under that law to other sectors such as semiconductors and lumber (processed wood known as timber in the UK). The president could also invoke Section 301 of the Trade Act of 1974, which he invoked for his first-term tariffs on China. A separate 1930 trade law, Section 338 of the Trade Act, which has not been used for decades, allows the president to impose tariffs of up to 50% on imports from countries that “discriminate” against the US. But the White House is also expected to press forward in challenging the court rulings. The matter is widely expected to end up at the Supreme Court.

‘Power grab’

Lawyer Ilya Somin, who helped work on the case brought by businesses before the trade court, said he was “guardedly optimistic” the ruling would ultimately be upheld on appeal. He noted that the trade court order came from justices appointed by both Democratic and Republican presidents, including one by Trump himself. “It’s not normal for the president of the United States to make such an enormous power grab and start the biggest trade war since the Great Depression,” he said. But Terry Haines, founder of the Pangaea Policy, which advises firms on Washington policies, said he thought “the president is probably going to be given the benefit of the doubt” by the courts.

Business owners, while expressing hope, said they did not yet feel like the situation was resolved. “I was incredibly happy and relieved but I’m also still very cautious,” said Kara Dyer, the owner of Boston-based Story Time Toys, which makes toys in China and imports them to the US for sale. “It’s just been so chaotic and so impossible to plan as a business,” she said. “I want this to work its way through our court system so we have a little bit more certainty about what tariffs will be in the future.”

Dmitry Grozoubinski, a former trade negotiator who represented Australia at the World Trade Organization, said the court battle had weakened Trump’s ability to use the duties for leverage over other countries. “It will be a lot harder for him to raise tariffs in the future,” he said. “This was ultimately a negotiation in which President Trump was threatening other countries with a big stick and that stick just got considerably more ephemeral.”

Kevin O’Leary:

I’m also critical of the stance that Harvard’s taken. And I have to be careful. I’m an executive fellow. I support — let me just disclose my association with Harvard. I’m an executive fellow there. I have been for years. I support the entrepreneurship program. I teach international students and domestic students in the executive programs, the MBA, and the undergrads as well.

And also to disclose, my son, who’s an engineer, was accepted at Harvard, and MIT, by the way, this year, and chose Harvard to go to school there. I think what has to happen is the president of Harvard, who, by the way, is Jewish, and he doesn’t have a single antisemitic bone in his body — and so — and many of the professionals I work with there are Jewish as well.

So I don’t think it’s an antisemitism issue at Harvard. Harvard cannot win the battle by suing the president of the United States. The president of Harvard has to get together with the president of the United States and work out whatever they’re going to work out.

Now, regarding the students — and you need to understand something here that I think I’m very passionate about. Harvard, the oldest educational institution in America, curates a remarkable cohort every year. They’re agnostic to religion, to race, to geography. They find the very best of the very best of the very best worldwide, and they put them into an educational institution to advance, learn, to advance science, to advance research.

And they are the very best at it worldwide, until recently. In terms of spending dollars right now, number one in the world is in Beijing. Number two is Harvard. And so America should understand we’re in a race on research because this is where the science comes from.

If we curate these people, and they come to America and they check out, their background checks have checked out, why don’t we offer them the ability to stay here and advance here, to grow their businesses here? Why would we train 37 percent of the smartest people on Earth at Harvard and then kick them out of the country 24 months later? How stupid is that?

Why don’t we fix this now in this negotiation? Create a program and offer it to every single educational institution in America and say, look, if you’re willing to make the pass, if you get actually invited, if you make the cut and you’re invited to Harvard or to MIT or to Temple or to Notre Dame, I don’t care. It doesn’t matter which one.

And you’re willing to go through the scrutiny of background check, and we approve you, we will give you the golden ticket to stay here, because I teach these students. They don’t hate America. They want to stay here. They’re the smartest of the smartest people on Earth I have ever worked with. They’re young. They’re incredible individuals.

Why in the world would you want to kick them out of here to go back to even a competing economy that decades later they build businesses to compete with us? How stupid is that? Let’s fix this now.

Another twist in the tariffs saga

The latest turn in Trump’s tariffs drama saw a federal appeals court reinstate his tariffs plan – after the Court of International Trade on Wednesday ruled that the US president did not have the authority to slap nearly every country with tariffs.

The Court of Appeals accepted the White House’s appeal to the earlier ruling – the one that requested they halt their tariffs within 10 days – saying that the tariffs plans could remain in place while the court “considers the motions paper”.

While Trump is yet to directly comment – on the trade court ruling yesterday or the appeals court ruling – one of his top advisors, Peter Navarro, took to the White House driveway to say the administration was prepared to take the case “up the chain of command” after the appeals court if necessary. This would mean asking the Supreme Court to rule on the constitutionality of its tariff plan.

Meanwhile, here’s a quick reminder of what the markets looked like earlier today, following the trade court’s ruling last yesterday:

Asia’s markets were up, with Japan’s Nikkei 225 index up by 1.9%, Hong Kong’s Hang Seng by 1.1%, and South Korea’s Kospi index by 1.8%

When the UK markets opened, the FTSE 100 was up by about 0.3%, but flattened within hours – while the pound was down 0.1% and trading between $1.34 and $1.35

was up by about 0.3%, but flattened within hours – while the pound was down 0.1% and trading between $1.34 and $1.35 The US markets also opened in positive territory, with the Nasdaq up 1.1%, the Dow Jones rising 0.2%, and S&P 500 gaining about 0.9%

And with that, we will be ending our live coverage for the day. If you’d like to keep up with the latest on this story, the following article will be kept up to date: Trump tariffs reinstated as legal battle erupts