The Trump administration is celebrating as seventy countries have come to the table to negotiate free trade deals with the United States in response to President Trump’s reciprocal tariffs announcement. Watch Treasury Secretary Scott Bessent on CNBC below:
President Trump’s end goal is bringing jobs and manufacturing back to the United States, raising wages, increasing revenues and reviving the American Dream. I’m proud to be working alongside him on behalf of the American people as we right the wrongs of longstanding global trade… pic.twitter.com/b4OxB5n6am
— Secretary of Treasury Scott Bessent (@SecScottBessent) April 8, 2025
There is something to learn about President Trump’s trade policy from his foreign policy.
In 2018, during his first term as president, Trump implored NATO allies to spend more on their defense. In July 2018, Trump wrote to Germany’s Chancellor Angela Merkel:
As we discussed during your visit in April, there is growing frustration in the United States that some allies have not stepped up as promised. The United States continues to devote more resources to the defense of Europe when the Continent’s economy, including Germany’s, are doing well and security challenges abound. This is no longer sustainable for us. Growing frustration is not confined to our executive branch. The United States Congress is concerned, as well.
He also made comments about the imbalance in defense spending at the NATO plenary session that same month:
Many countries owe us a tremendous amount of money from many years back, where they’re delinquent as far as I’m concerned, because the United States has had to pay for them. So if you go back 10 or 20 years, you’ll just add it all up, it’s massive amounts of money is owed.
After asking nicely for Europe to take its security seriously, and being ignored, Trump has taken a more aggressive approach in his second term. Now, Europe is scrambling to rearm.
Just a month before his comments to Angela Merkel and the NATO meeting, Trump was venting his frustrations with trade policy, and once again, asking the world nicely to play ball on free trade. Arthur Laffer and Stephen Moore explain in a Wall Street Journal editorial:
With markets still roiling from the steep tariffs President Trump announced last week, the White House needs a smart and urgent exit strategy to restore confidence. Mr. Trump must make sure that the “short term pain” of last week’s $7 trillion of wealth liquidation doesn’t persist.
It’s time to bring on the promised long-term gain from his trade policies. Here’s how to do just that. In 2018 at the Group of Seven meeting in Charlevoix, Quebec, Mr. Trump made a remarkable free trade proposition to the world’s leaders: The U.S. would lower its tariffs to zero if their nations would do the same.
His exact words were: “No tariffs, no barriers. That’s the way it should be. And no subsidies. I even said, ‘no tariffs.’ . . . Ultimately, that’s what you want. You want tariff-free, no barriers and you want no subsidies.”
Larry Kudlow, who headed Mr. Trump’s National Economic Council, recalls that this was a jaw-dropping incident. European and Asian leaders sprinted for the exits. Among other things, it exposed the trade policy hypocrisy in Brussels and Beijing. If you listen to the self-righteous indignation today from leaders in those capitals, you would think they were Adam Smith reincarnated. But Mr. Trump is right that their tariffs are higher than ours.
After being ignored on defense, Trump took drastic measures to put Europe on notice. Similarly, after being ignored on trade, Trump has taken drastic measures. But it appears Trump would prefer free and open and fair trade to a tariff war, but no one listened when he proposed it.
Laffer and Moore suggest Trump should give a televised address, “announcing to the world that the U.S. is ready to drop its tariffs and industry subsidies to zero tomorrow on any nation that does the same. This would be the ultimate reciprocal tariff policy.”
Action Line: Click here to subscribe to my free monthly Survive & Thrive letter.
