Trump’s tariff’s whims make for uneasy economics- or do they ‘Daddy’?

Recently the Secretary-General of NATO, Mark Rutte, in an embarrassing departure from diplomatic norms referred to President Donald Trump as ‘Daddy’. Rutte was thanking Trump for shepherding the rest of NATO into increasing defense spending by 5% but also because he, Rutte, believes that he has learned lessons from previous debacles in the White House involving President Zelensky of Ukraine and President Cyril Ramaphosa of South Africa, who both got a public dressing down. In other words, don’t argue; nod your head vigorously, heap a wholesome variety of praise on the US President and for special measure offer to nominate him for the Nobel Peace Prize. Europe may have agreed to increase defense spending to levels it knows it cannot really afford and with cuts to social spending that are bound to have repercussions, but it seems to think that it has won Trump around to its thinking on Putin and Ukraine and on Article 5 of the NATO Treaty which is supposed to entail all members responding to an attack on another.

But this is today. For just as Europe’s leaders believed that they had tamed ‘Daddy’ over defense, he came roaring back over trade, mid negotiation, threatening a 30% tariff of EU exports to the United States. The EU believed that it was edging close to a deal, but apparently not. Trump is alarmed by the big deficit in trade with the EU, its largest trading partner. He wants complete access to its markets and hence the latest round of brinkmanship. Tariffs are a blunt instrument, probably to be used sparingly and wisely, and so countries such as Morocco (and the United Kingdom) which appear to enjoy some personal largesse from the President have so far escaped comparatively lightly. Instead of 30% tariffs, they are 10%. And, of course, both countries are comparatively small exporters to the United States when compared to the EU. But how to plan when the rules can be upended at a moment’s notice? Britain, for instance, thought that it had a new trade deal with the United States that included the lifting of proposed tariffs on the admittedly small amount of steel exported to the US, one of those highly sensitive areas that the US has been throwing protectionist orders around for a very long time. Then it was discovered that the tariffs would only not be applied to steel forged in Britain, i.e. from the traditional blast furnaces – and since there is only now one of these steel plants left in the country, it is back to the drawing board.

In recent months Morocco’s trade deficit has been widening, with the deficit reaching something in the region of $12 billion in the first four months of 2025. And yet when it comes to US tariffs Morocco still currently finds itself in a happier position than near neighbors Algeria and Tunisia which currently face 30% and 28% tariffs respectively. But there again Morocco’s Free Trade Agreement with the US – the only one between it and an African country could have contributed to Morocco’s trade imbalance. Last year the US exported over $5.3 billion to Morocco while the latter exported $1.9 billion in goods and services to the US. Hitting Morocco with excessive tariffs could have led to Morocco raising concerns with the US about a trade imbalance in part caused by the FTA.

Planning key decisions around international trade has become a hazardous occupation for all the reasons mentioned. Which is why some of the poorest countries are now paying hugely expensive lobbyists to try and influence the US President. But there are clearly cheaper ways of doing this if any country has the means to do it. Prime Minister Starmer’s flourish of a letter from King Charles inviting President Trump to Windsor Castle and for a State Visit, may well have had something to do with the relatively benign tariff treatment meted out to the UK. And watching Trump’s reception by the Saudi King was another reminder of how to press the right glitzy buttons. So, one doesn’t really need to guess at President Trump’s beaming reaction should a state visit to Morocco be mooted by King Mohammed VI. 

*Mark Seddon is a former Speechwriter to UN Secretary-General Ban ki moon & former Adviser to the Office of the President of the UN General Assembly