Trust in the US, particularly in Europe, has been damaged

First was how someone could ignore all advice for a solo run that ended in disaster. It is akin to the Captain Mainwaring comment to Private Pike in Dad’s Army – “you stupid boy”. Less kindly, as stock markets recover, it was hard not to wonder how many Trump insiders gained from buying shares when markets fell, to sell them a few days later at a big profit. Cynical that may be, but there is no question some will have gained from a president whose ego was eventually forced to accept that tariffs are the opposite of policies that deliver stability, low inflation and economic growth. If Trump had hoped for a publicity grabbing knee-jerk reaction from other countries he will be frustrated. The UK and EU deserve credit for taking their time to react, opting instead to warn of retaliatory sanctions but seeking negotiations.

This reflects the logic of two great leaders on either side of the Atlantic – Churchill’s “jaw-jaw being better than war-war” and Roosevelt’s approach to diplomacy being that the way to go about it is to “tread softly, but carry a big stick”.

By ignoring those great statesmen’s approaches Trump courted disaster. Beyond being humiliated and forced to back down he has damaged the reputation of the United States as a business partner and supplier. He might be writing off his tactics as a good try that did not work out as planned, but he has been left looking even more untrustworthy. As the chaos continues, farming is a better industry to be in than many others.

The global economy may look marginally more secure now that Trump has backed down, but the toys could come out of the pram again before too long. Agriculture offers stability in troubled times.

Like gold, government debt and metals, it is seen as a safe investment in turbulent times. Demand for food is guaranteed and that is mostly about domestic markets. Only a fraction, globally, of what is produced is traded on export markets where tariffs bite. Most of the demand is from stable domestic markets that offer welcome stability in an uncertain world, although prices from those domestic markets could always be better. In backing down over tariffs Trump has kept the huge tariffs he imposed on China.

It has matched these, targeting in particular farm products across the board as well as farm machinery. This raises an interesting situation. China, which is still a communist country, is now an advocate of free and open global trade.

By contrast the US, as the traditional bastion of capitalism, is undermining open trade and the rules that govern it – rules originally put in place with a big input from America. Big tariffs on China will give US consumers the worst of all worlds – high inflation because of tariff driven rising prices and the loss of income and jobs, particularly in the heartlands of the Midwest, because Chinese tariffs have closed a big market to US businesses.

For the rest of the world and particularly Europe this is a great opportunity. China is a vast market with a prosperous middle class ready to spend; they want western-style high value food and drink products. China is already a good market for the EU.

It is in the top three export markets for EU food. This triggers the big question around the Trump tariffs, whether they fade away after the 90 day pause or are maintained on China.

Trust in the US, particularly in Europe, has been damaged by the tariff threats and the US distancing itself from NATO’s defence of Europe. This raises the prospect of new trade alliances – possibly even a trade deal of some sort between Europe and China. With or without that deal, farming around the world, other than in the US, now has an open goal to supply gaps in the Chinese market left by the US being priced out by retaliatory tariffs. That creates a great opportunity to exploit the mess Trump has rained down on American farmers and export businesses. With what he has done over tariffs he has created living proof of the old adage that “one man’s misfortune is another’s opportunity”. Under Trump’s chaos opportunities for others to gain from it are guaranteed. Ultimately Trump lacks the political or business acumen needed to heed sound advice and play a long term strategic game.