U.S. President Donald Trump has long insisted that “trade wars are good, and easy to win.” But his recent policy shifts and softened rhetoric suggest he may now realize he overplayed his hand in escalating trade conflicts around the globe.
Countries from China to the European Union are watching as Trump retreats from his once-aggressive stance on tariffs. He now promotes the idea of “fair” trade deals and has toned down his confrontational style.
In a recent meeting with Italian Prime Minister Giorgia Meloni, who does not have the authority to negotiate on behalf of the EU—Trump expressed strong confidence that a trade deal with the bloc was certain. Just a week later, he told reporters he wouldn’t “play hardball” in talks with Chinese President Xi Jinping. He even hinted that a 145 percent tariff would be lowered—a major concession that violates a basic rule of negotiation: never negotiate against yourself.
This dramatic shift marks a rare moment of vulnerability for Trump. The core issue? He misjudged both the strength of the U.S. position and the resilience of its trading partners.
Trump believed that the U.S. held all the cards. He assumed other countries rely heavily on access to the American market, while the U.S. could afford to walk away. He expected nations to offer quick concessions under pressure.
However, that leverage wasn’t as strong as he thought. While the U.S. is a major market, it is only one of many. Countries have already started shifting their focus to other regions. For instance, China now exports more to Southeast Asia than it does to the U.S. Many Asian countries are experiencing rapid economic growth and rising middle-class demand. Meanwhile, regional free-trade agreements are making it easier and cheaper for countries to trade with each other, bypassing the U.S.
Trump also seemed unaware of how much the U.S. depends on certain foreign imports. Cutting off access to those products doesn’t instantly create domestic alternatives. American manufacturers can’t suddenly appear to produce iPhones or sneakers. If imports are blocked, U.S. consumers may face product shortages and much higher prices.
That warning reportedly came from major U.S. retailers who told Trump that store shelves could soon be empty if tariffs stayed in place. This may have contributed to his more flexible approach.
Still, some in Trump’s circle see things differently. Commerce Secretary Howard Lutnick claimed supply disruptions would boost American factory jobs. He predicted millions of workers would be hired to assemble products like smartphones in the U.S. But that vision overlooks both the complexity of reshaping the U.S. economy and the reality that most Americans prefer buying goods like Nikes—not making them.
Another misstep in Trump’s trade war is underestimating how well prepared other nations now are. During his first term, many were caught off guard by his aggressive tactics. But since then, they’ve had time to plan their response.
The EU, for instance, is readying an Anti-Coercion Instrument, which would target U.S. services—one area where the U.S. enjoys a trade surplus. Big American tech firms may be the first in line. China, too, has expanded its countermeasures, blacklisting U.S. companies and restricting access to vital materials needed for electronics and defense equipment.
Trump’s decision to confront so many trade partners at once now seems like a strategic miscalculation. His softer tone may not reflect panic, but it does suggest concern. He appears ready to dial down the tension.
However, the global community is unlikely to make things easier for him. Trump has said he’s open to a call from President Xi, but that call hasn’t come—and may not.
As the situation evolves, the world faces a new uncertainty. What’s more dangerous for global stability: a defiant, overconfident Trump—or a rattled and cautious one? The answer may come soon.
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