02/10/2025

Trump's geopolitical strategy in the past week has been a combination of pressure and concession. His actions on trade policy, diplomacy and security have shown a trend towards consolidating his image as a tough negotiator who is prepared to challenge established international trade and global geopolitical rules. The decision to impose 25% tariffs on Canada and Mexico and then suddenly withdraw them after border security and Fentanyl trafficking concessions are clear examples of his negotiating style. Rather than a change in direction, these actions suggest that tariffs were a way to apply pressure from the outset, and were designed to obtain political concessions without generating an immediate financial cost.

China is different. The decision to impose a 10% tariff on all Chinese imports shows that the trade war is getting tougher. However, this also appears to be a many-layered maneuver in terms of objectives, and Trump's main objective from his first term in office, which was to improve America's trade balance with China, is just one of these.

Firstly, Trump intends to reinforce the geopolitical leadership of the United States to send global allies and competitors a sign of strength. Secondly, he seeks to weaken the Chinese economy at a time of vulnerability, when growth is slowing and Beijing is dealing with structural problems in its real estate and financial sectors. Finally, he highlights the need to ensure technological supremacy by making it difficult for China to access critical technology in key sectors such as Artificial Intelligence and semiconductors.

The Chinese response has been measured, with tariffs on energy products and new investigations into US technology giants, which indicates that the authorities want to avoid immediate escalation, although they do not rule out more aggressive retaliation if the situation requires it.

Meanwhile, Europe is on Trump's radar as his next trade strategy target. In recent statements, he has hinted that tariffs on the European Union could be imposed "very soon," which has led European leaders to start considering how to respond. The European Commission has warned that if the United States imposes tariffs, the EU will respond with equivalent actions, including potentially placing restrictions on large American technology companies. However, Europe is in a weaker position than China to withstand a prolonged trade war. Its economy is already facing a slowdown and an industrial crisis, especially in Germany, which gives it less room to maneuver.

On the geopolitical front, Trump has once again surprised people with his rhetoric about Gaza, suggesting that the United States could take control of the territory and transform it into a sort of "Middle East Riviera". Although these statements were quickly clarified by his administration, they reflect a characteristic pattern of his negotiating style: start with an extreme proposal to then retreat to a more realistic position that still allows you to move your agenda forward. His statement has been used to demarcate territory in the discussion on the future governance of Gaza. However, this position increases uncertainty in the region and could hinder negotiations to extend the current ceasefire with Hamas.

In the conflict between Russia and Ukraine, Trump has hinted at the possibility of a peace plan that would include a ceasefire before Easter, which, if it were to happen, would significantly change the dynamics of the conflict. Although his administration has denied that there is a formal plan, the mere suggestion of a potential agreement has generated speculation on what the terms would be. One possibility is that he is trying to put pressure on Ukraine to accept territorial concessions in exchange for security guarantees from the United States and NATO. He has also hinted that the United States could gain access to Ukraine's natural resources as part of any agreement, which fits with his transactional view of geopolitics.

In summary, we must once again get used to Donald Trump's hyper-communication, the impact of which will be felt on multiple economic and geopolitical fronts. However, we must also assume that what he says should be taken seriously, but not always literally.