Trade Wars? Not Quite—Trump’s Tariffs Might Be Over
Some critics claimed that tariffs would spark a trade war. Ironically, it seems Donald Trump has brought one to a close instead.
On Monday, the White House shared news of a trade deal with Vietnam: the U.S. will impose a 20% tariff on certain imports, while Vietnam will eliminate tariffs on U.S. exports. The previously threatened 46% tariffs, set to take effect on July 9, are off the table.
No retaliation has occurred. There’s no breakdown in discussions. What unfolded is quite different: a negotiated settlement. This suggests that Trump’s trade policies, often viewed as erratic and perilous, might actually be more grounded than critics previously thought.
This isn’t about revolution. It’s more about fixing what’s broken.
Earlier this year, we discussed the economic principles underlying Trump’s approach. Many seemed to overlook these insights. The theory around Trump’s tariffs indicated that he wasn’t merely starting a reckless trade skirmish but applying established economic concepts—especially the Optimal Tariff Theory—to a flawed global landscape.
This theory holds that big economies like the U.S. can shift some burdens onto foreign exporters, thereby enhancing their own terms of trade. Strategically imposed tariffs can also open foreign markets that have long been shut off to American goods. That’s what we’re witnessing now.
Metternich’s Strategy: Trump’s Tariffs Foster Trade Peace
Vietnam was facing 46% tariffs, with the July 9 deadline looming. As costs became apparent, Vietnam made concessions. They’ve agreed to a 20% tariff on exports while eliminating tariffs for the U.S.—a clear step back from the brink. This showed the viability of the discussions we analyzed just a few months ago.
The current situation isn’t about trading disruptions; it’s more like a carefully calibrated rebalancing. It reminds me of older diplomatic approaches that conservative historian Peter Viereck discussed in his 1949 book, A Revisit of Conservatism. He advocated for a revival of Prince Clemens von Metternich’s methods, an Austrian leader who sought to restore order post-Napoleon. Metternich avoided outright revolution, instead focusing on creating peace while realigning Europe’s balance.
In terms of global trade, Trump seems to be playing a similar role.
For many years, American trade policy has been misguided. The prevailing belief was that opening U.S. markets would lead to peace and prosperity. This notion failed to match reality. We opened up, while other nations remained closed. For instance, China’s aggressive trade strategies and the non-tariff barriers from so-called “trade partners” sabotaged these ideals. Even with reports from think tanks in Washington, little changed.
Until Trump altered the narrative.
He began the year emphasizing the need for fairness—introducing tariffs as a way to declare that trade couldn’t be one-sided anymore. His country-specific timeline for tariff enforcement shifted the conversation. Unlike previous leaders who treated U.S. strength apologetically, Trump embraced it, and his strategy paid off with Vietnam.
Critics dismissed the idea that tariffs could lead to constructive outcomes. But to their surprise, Vietnam engaged in negotiations. Even some of Trump’s staunchest critics acknowledge that this approach might have merits. On Wall Street, a shift in perception regarding Trump’s effectiveness is emerging. One economist noted that “Trump might have outsmarted us all.”
Ironically, Trump isn’t doing anything radically new. He’s pulling from established diplomatic strategies and applying them economically. What many labeled “protectionism” has turned out to resemble Metternich-style diplomacy. What some view as chaos increasingly appears to be a clear strategy.
Vietnam as a Blueprint: Anticipate Further Trade Changes
The agreement with Vietnam is a significant precedent. It illustrates that the U.S. can leverage its economic strength to reshape trade terms in the modern world, under scrutiny from all angles. It proves that tariffs can unlock concessions where others have failed.
In A Revisit of Conservatism, Viereck noted that Metternich offered “the dignity of endurance.” Through these negotiations, Trump seems to bestow a similar dignity upon American workers and industries—a long-term restoration of balance and a recognition that access to the American market is not a guaranteed right for foreigners.
Trump’s tariffs haven’t plunged the global economy into chaos. Instead, they compelled participants to play fair.
We predicted this outcome. Back in April, some speculated a potential reversal, yet here we are. The agreement with Vietnam isn’t surprising at all; it serves as proof.
This isn’t the start of a trade war. It’s the conclusion of one. And reconciliation has been achieved through a most unexpected political figure: the Metternich of trade.
