16 ms·
The world should've collectively recognised what Liberation Day was and responded together, in lock step, and in kind. Instead, the Europeans caved, Japanese c
by hunglee2 26d ago
The world should've collectively recognised what Liberation Day was and responded together, in lock step, and in kind.
Instead, the Europeans caved, Japanese caved (PM resigned after doing so), Republic of Korea caved (PM resigned after doing so), India of course caved and so on, shattering any prospect of collective action which might pull the rogue hegemon back into line.
Now, the US is simply able to renege or renegotiate the bilateral deals whenever he feels like it, forcing the other party to face down the US by themselves - not many can do this, maybe only China. Anyways, I wish the Canadians well and I hope they gain global support
- toomuchtodo 26d agoThey still can of course, all they need to do is collectively start selling off their US treasuries. The US is at a highly vulnerable and precarious point with their potential bond market debt spiral situation, and this is a point of leverage that can be exploited to encourage improved behavior from a bully. This capital can then be reallocated into domestic investment to continue to decouple from the US. Very similar to how Germany learned the hard way that buying fossil gas from Russia wasn’t going to prevent aggression. Canada has started this with their recently announced energy investment plan, Europe can do this with Eurobonds. PM Carney announces largest clean energy investment in North American history - https://news.ycombinator.com/item?id=49339577 https://news.ycombinator.com/item?id=49339577 - August 2026 China and Canada Energy Pact as Canada Aims to Cut Reliance on US - https://news.ycombinator.com/item?id=46640932 https://news.ycombinator.com/item?id=46640932 - January 2026 (a component of China’s next five year plan includes LNG infra investment to support imports from Canada) On Eurobonds: Macron says €300B in EU savings sent to the US every year will be invested in EU - https://news.ycombinator.com/item?id=46722594 https://news.ycombinator.com/item?id=46722594 - January 2026 (207 comments) https://news.ycombinator.com/item?id=46708337 https://news.ycombinator.com/item?id=46708337 (Canada and Europe collective hold ~$9T in US treasury debt, almost 25% of total outstanding debt)
- iamjs 26d agoCouldn't the US buy back more bonds through QE than any foreign country could sell?
- toomuchtodo 26d agoDebasing the currency is equivalent to a soft default, and would accelerate investment away from the dollar and treasuries. Mechanically, certainly, it can be done, but investors won’t do nothing while the US inflates their asset value away. They’ll take the loss (which they’d take anyway from monetizing the debt) and reallocate elsewhere. Part of the reason Ray Dalio was on Bloomberg saying to sell bonds and buy gold or Bitcoin. Treasuries used to be where capital would “flee for safety” and that concept is breaking down. Dalio Says Sell Bonds, Buy Gold, Bitcoin as Debt Crisis Looms - https://www.bloomberg.com/news/articles/2026-08-21/dalio-says-sell-bonds-buy-gold-bitcoin-as-debt-crisis-looms https://www.bloomberg.com/news/articles/2026-08-21/dalio-say... | https://archive.today/jlUBA https://archive.today/jlUBA - August 21st, 2026
- ColdStream 26d agoOuch! I'm not a huge fan of Dalio, I think he misses some big picture stuff outside of economics but when it comes to just economics he has a fairly good grip on it. So when he is saying that, interesting times ahead. Not saying he is right but that is a fascinating signal of were things are going.
- sandeepkd 26d agoThis is a classical problem. In theory it works when majority of the players work together and move in same direction, however everyone being opportunistic here makes in infeasible from long term perspective. Europe itself is in a difficult stage, its dealing with Russia on one end, has trust issues with China and now the its long term partner has gone rouge. The result of all this would be a mandate to be self sufficient aka anti-globalization
- toomuchtodo 26d agoThat multipolar world mandate you mentioned is already here today. That was the outcome of the actions of this US federal administration. Trust and cooperation is done for a half decade or more. The world can’t trust this administration for the remainder of the administration, and they can’t trust the US electorate to elect adults for the next administration. Countries can either accept it and take action to manage their risk (redirect investment to continue to decouple, trade deals with rational counterparties) to attempt to achieve a favorable outcome, or not and experience the potential natural consequences. https://news.ycombinator.com/item?id=43284950 https://news.ycombinator.com/item?id=43284950 - March 2025 > “How can I decouple from the US as fast as possible?” is what this leads to. > Diplomacy is the art of saying “good dog” until you make it to the rock. The US will apply pressure for short term gain against allies while they move away long term.
- lunatuna 26d agoI think this is where Carney landed. Trust is gone. Further, the US and the world would have a precedence in dealing with Canada. Accepting a bad deal would maintain an illusion that this was good enough and to continue on in this direction. Once Trump is gone the negotiations could restart but at a much less valuable position to Canada. Canada has had a long term investment and productivity challenge with too much focused on North and South. I suspect that this is now the catalyst for East and West investment. I think the calculation was that no deal and the natural consequences are not that much worse than the deal on the table short term. And taking into account the future of the above it was going to be worse.
- lowbloodsugar 26d agoJapan did start selling off US treasuries because the yen is fucked. They stopped when the US agreed to buy yen and sell euros. If China starts selling treasuries, US is fucked. But it’s in China’s interest to have this incompetent in power.
- tick_tock_tick 25d agoPeople don't invest in the US from Europe because they love the US, but rather because investments in Europe are shitty.
- frm88 25d agoAlphabet is issuing Euro bonds in big tranches. Euro, not dollar. They diversify away from the dollar: https://www.reuters.com/business/alphabet-taps-euro-bond-market-with-six-tranche-offering-2026-05-05/ https://www.reuters.com/business/alphabet-taps-euro-bond-mar...
- toomuchtodo 25d agohttps://www.reuters.com/world/china/foreign-holdings-us-treasuries-fall-june-led-by-japan-uk-china-data-shows-2026-08-17/ https://www.reuters.com/world/china/foreign-holdings-us-trea... https://www.wsj.com/finance/stocks/stock-market-bargains-are-hiding-in-this-overlooked-place-6239c1ef https://www.wsj.com/finance/stocks/stock-market-bargains-are... https://www.youtube.com/watch?v=wTiYaWFP59Q https://www.youtube.com/watch?v=wTiYaWFP59Q
- bambax 26d agoAbsolutely agree; but it's never too late to react. Europe could impose tariffs on US tech or forbid it altogether to bid on government contracts. Etc. What are we waiting for.
- hunglee2 26d agothe bilateral deals signed means we (the world, minus the US) is already divided. Got to scrap those deals first, which isn't going to happen. The shark has scattered the shoal and we're all going to get picked off - perpetually signing worse deals, then having to renegotiate again before signing ever worse terms.
- amelius 26d agoIf Trump can scrap bilateral deals, then others can too, using similar tactics if necessary.
- LeFantome 26d agoWhy does any country need a deal with the US? Canada is more integrated than anybody and they are walking away. Canada believes productive trade with the rest of the world is better than a bad deal with the US. China was prepared to do the same. The world should take notice.
- bambax 26d agoExactly. If Canada can do it, who can't??!?
- thesmtsolver2 26d agoThe world collectively had so much trade barriers for US goods and services and still has. They just weren’t direct like tariffs.
- blitzar 26d ago> trade barriers for US goods and services are the trade barriers in the room with us?
- disgruntledphd2 26d agoTo be fair, EU standards prevent the sale of lots of US products so that point, while misleading, is not entirely incorrect.
- deleted 26d ago[deleted]
- Frieren 26d ago> prevent the sale of lots of US products Not only USA products. Most countries with low safety standards and known for dangerous products are barred from trading with the EU, or at least many of their products. Recently, even big Chinese on-line shops are being targeted for selling dangerous products and lying on the description on that products. I understand that quality and safety is a diminishing goal for the USA. But I hope that other countries keep the care for their citizens as a achievable goal. > is not entirely incorrect With enough re-interpretation nothing is not entirely incorrect. Agree on the part that it is misleading.
- surgical_fire 26d agoThat is not a trade barrier, that is just what you call "food" across the pond is actually trash.
- disgruntledphd2 25d agoI'm Irish, btw. I agree with the food regulations but they do exist.
- armada651 26d agoEveryone is banking on the current trade policy simply being temporary and whoever replaces Trump in the White House next will restore bilateral trade to normal. Why would you destroy your trade relation with the U.S. for decades to come when you can just ride out a bad deal for a few years? Not saying I agree with it, because it sends the wrong signal, but I can understand the reasoning at least.
- roncesvalles 26d agoExactly. You can't assume it's a new normal until Trump is out of office.
- ben_w 26d agoHis re-election suggests we need to. Even if good times return, we can now never be sure the bad are more than one election cycle away, and given the USA's bicameral government and staggered elections, that means 2 years, not 4.
- tremon 26d agoYou can't assume things will return to the previous normal while the Supreme Court maintains its current composition either.
- goatlover 26d agoWhich is why Democrats need to alter that composition once they retake power.
- wwice 26d ago>> India of course caved and so on, India and US still have not signed any trade deal. Not sure what's the basis of your comment.
- deleted 26d ago[deleted]
- nojvek 26d agoIndia and China have their own trade books. No one other than close US allies caved. And even then, they all realize Trump is a mad man and cannot be relied upon.
- ColdStream 26d agoI mean look at the Japanese deals, it has some of the most wishy-washy loose language I have seen in a serious political document for a very long time. We indent to do this, they propose that, there is aspirations of this. They caved but only in the most symbolic fashion possible. I see a lot of diplomacy at hand. "Speak softly and carry a big stick; you will go far." - Theodore Roosevelt,
- Sabinus 26d agoAnd all that works on Trump because he's fundamentally an unsophisticated political actor. Once you get past the shock of the aggressive strategies he uses, he can be outmaneuvered by experienced politicians who trust their institutional experts.
- dzonga 26d agothey carved because most of those places want access to the 'yuuuge' US market. politics vs reality. they could correct though by selling US treasuries - but that would make the world economy sneeze which might result in pneumonia.
- fifilura 26d agoThe parent point is that the response should have been done collectively. USA market is "yuuge", but rest-of-the-world market is much much bigger.
- 2OEH8eoCRo0 26d agoUS treasuries sound risky in a sense that if you accumulate them they become a crisis when you choose to sell.
- coolandsmartrr 26d agoJapanese here. Caved is not an accurate expression. After intense negotiations with Trump, Lutnick, and Bessent, Minister Akazawa managed to reduced the tariff from the proposed 25% to 15%. His story of flying weekly to the States on commercial aircraft became legendary. PM's resignation stemmed from unpopularity not due to tariff negotiation, but diminished ability to pass laws after the ruling party lost significant number of seats in elections for upper and lower houses. As for other countries around the world, the world-wide inflation caused many ruling parties to lose support.
- Chyzwar 26d agoThat not how politics works. It is much slower and hidden process. EU fast tracked Mercosur and other trade deals. China and Japan is slowly dumping US treasury bills, Canada is in open trade confrontation and is diversifying toward China. Everybody is shifting away from US weapons suppliers. Nobody is willing to help with Iran even on symbolic level.
- LeFantome 26d agoYou are both right. The world capitulates more than it should. But the world is also moving away and building contingencies. The world needs leadership. And Canada is helping with that. I do not think that reciprocal tariffs are actually the answer though. They hurt both sides and the US is not a rational enough actor to respond like you hope they will. The answer is in shifting trade away from the US and isolating their economy. It takes longer but it is what will work. And even if their behaviour does not change, their power will fade with their economy.
- bryanlarsen 26d agoBut what tool do you use to shift trade away from the US to other countries? Tariffs are perhaps the most efficient mechanism.
- 8note 26d agoregulatory alignment is an obvious one there's plenty of barriers without tariffs holding up trade between blocks and countries.
- chermi 26d agoCreate and serve better products more efficiently while the US insists preserving unproductive jobs and banning progress is more important than growth and affordability. Learn from what they did well and what they did poorly, copy the good parts.
- swat535 26d agoAs a Canadian, my hope is that we can build stronger relations with Europe. I don't think anyone can avoid China but I would rather minimize those ties. We can't afford to cut all ties with United States due to our geography and history, however it would be prudent for us to reduce our dependency. I don't think majority of Canadians wish to see the nation in such a vulnerable position again with regards to US. Banking on a single player in terms of security and trade has proven to be a risky endeavor. I have much love for the American people, but I support the actions of our government.
- mmooss 26d agoThey were not prepared and at least had to mitigate immediate harm, while preparing their economies, security, etc. to be less entangled with the US. But once they are 'prepared' as best they can, one approach is for other countries to decide / accept that the US is mostly a lost cause while Trump or most other Republicans are in power, which will happen at times. It will affect their economies but they cannot control that. Negotiating with the US only encourages more bad behavior. The rest of the world could then recreate (or continue) the global trading system, including the WTO, simply excluding countries that violate its rules. This puts the ball in the US's court to participate or not, never slamming the door in the US's face, always welcoming and encouraging them rhetorically, by their rules, and genuinely ('we look forward to our friends in the US joining and enjoying the benefits of doing business with the rest of the world'). In the meantime, global trade rules would be created in the interests of the other countries, without the US having a voice - a great boon after decades of US domination of such rules. This incentivizes the US to join sooner rather than later. (It seems to me - I have no expertise in this area.)
- delusional 26d agoYou're forgetting that their president was threatening literal invasion. These things take time.
- thisisit 26d agoThis ignores two facts. One, US has been the largest buyer of imported goods. As much as people think turning away is difficult and needs planning. Two, turning away requires time and planning. Supply chain isn't built in one day. People need time for that. In the short term - like next 3-4 years - it is going to look like countries caved. But in the long term Liberation Day will be remembered as one of the days which put a nail into the American exceptionalism.
- 8note 26d agoi think canada has found that its been less difficult than we thought it would be ultimately the US is buying stuff, but its the stuff thats actually valuable and not the USD you get from it. its even easier to move when you cant even buy oil from the gulf anymore, whether in USD or otherwise. the supply chain problem arrived in trump 1's covid disaster, and hasnt exactly been solved for getting stuff to the US again
- ColdStream 26d agoI was very impressed at the pace at which Canadians got behind the move away from US goods. Turns out threatening to annex a country and NOT having those making the threats get punished/thrown out does that. It shows a significant enough part of the US would support the move. That portion might only be 10-30% (who knows exactly) but it is enough that it cannot be ignored and it will keep coming back. There are still more fundamental materials markets that will take years/decades to move away from but that is already happening.
- ColdStream 26d agoLong term it is a very tough position for the US. They need to run a trade deficit to keep the power of the US dollar, if that goes so does a lot of their world power. More broadly however, the question that I think everyone should ponder on is, "If the US falls as the world super power, do you think the alternative will be better?" A huge part of the US's spending is on the military and that is used to stabilize global trade, that is so that the USD is still THE major currency. But recent moves looks like they are trying to keep that while also kicking out the struts that hold up the entire system. It is very illogical, maybe there is a bigger plan but somehow I don't think there is.
- chermi 26d ago"Now, the US is simply able to renege or renegotiate the bilateral deals whenever he feels like it, forcing the other party to face down the US by themselves" This won't last. There are consequences for behavior on all scales. If you prove yourself untrustworthy and treacherous, people will treat you as such. International politics don't move very quickly, especially if coordination is required. But it will eventually move. "Winning" at all costs has never ever been sustainable and I don't think see why this time will be different, especially with diminishing real power. "They make it a desert and call it peace(winning)."
- ColdStream 26d agoThere is a Japanese proverb "A thousand years of good reputation is ruined in a single hour." Trump has burnt up the single most valuable asset any country or person can have. Trust.
- don_esteban 25d agoThis is very west-centric view. The countries of the south on the receiving end of US/western 'help' have been disabused of viewing US as 'a shining city on a hill' by their own experience, long time ago. They saw Carney's Davos speech recognizing the hypocrisy of 'rules-based international order' as just another hypocrisy: you were quiet while those rules suited you, now you squeak, when you are on the receiving end. But yes, the people in the west are waking-up. I have gone through the fall of communism. From years when most people actually believed in it (I did not live through that, too young), to years where people knew the system is a sham, but things looked unshakeable, to years where 'something' was in the air, but a real change was unimaginable, to the sudden and very real fall. We are in 'something is in the air' with the current western system. The problem is that for the communist countries, there was an alternative - the western system (yes, the west's soft power of jeans & coca cola worked). And the communist elites lost their will to power (or had already pre-planned path to oligarchy). Nowadays, there is no clear alternative, and the western elites seem determined to keep the system at all costs (see all the surveillance technology, the push for AI is also relevant). So, the change will be much messier and possibly bloodier than the fall of communism.
- deleted 25d ago[deleted]
- tick_tock_tick 25d agoI mean they caved because they don't have a choice. Look at how their economies have done since the great recession.
- florkbork 25d agoArguably, the individuals of the world did - US international tourism is down by as much as 7% according to some sources.
- nirui 25d agoIt's like all the other nations were at fault. But maybe these nations "caved" because the strategy implemented by the US worked. And China, based on my understanding, is looking for ways to reduce US influence anyway at least domestically. So, a worsen-yet-controllable US-China relationship maybe considered beneficial on that end. The tests (lockdown etc) done during COVID time has proven that Chinese people endures much more suffering before they begin to rise up, so the economic problems introduced by not caving to the US is just a small cake for the lead party to handle.
- traderbalance 25d agoIndia has stood up the most to the US even in the face of >50% sanctions for buying Russian energy. The fact that there is no trade deal between the India & US as we speak is testament to this. Your characterization that India has caved is factually incorrect and seems to be driven either by ignorance or by mischievous intent.
- jmyeet 25d agoAfter WW2, the US largely designed the new world order for its own benefit. It became the world's arms dealer, the US dollar became the world's reserve currency and it had effective control of the world's financial system. And the US got very rich from all of this and wielded a lot of power. The US has done more to destroy the system it designed and benefits from in the last 1.5 years than at any time since 1945. What this entire fiasco is about is China. China is the new superpower. It threatens the American global hegemony because it can't be bullied. Why is China the new Big Bad? To sell weapons. Pretty much the entire of American foreign policy is about selling weapons. So Liberation Day was a ham-fisted way to try and isolate and bring to heel China. It has failed spectacularly because the dumbest sychophants imaginable are in charge of this administration. Because while doing all this, we're witnessing a lootocracy on the largest scale ever seen. When Trump took office in 2017, the national debt was ~$16T and it had taken ~200 years to get there. It just got over $40T. That's like $2T in interest payments every year just to service the debt. Long ter bond yields keep going higher. That's going to be a really big problem, particularly because there's a political desire to lower interest rates. That's ismply not going to happen and record-high inflation is going to continue, if not get worse, all while real wages stagnate or decline. So the US can't economically compete with China. Well, it can't militarily compete either. The US has been deceisively been totally defeated by Iran, an absolutely pointless war of choice. And they think they can bully China? Get the hell out of there. Part of the problem is the (now) $1t+ in annual military budget is just more looting from government coffers. Empires don't die slowly or quietly. That's really what's happening here. The seeds of destruction for the Gulf security architecture have been sown. While Europe is still an American vassal state, realization is growing that the status quo cannot continue. Unfortunately I suspect a fascist takeover will happen long before Europe divests itself from the US protection racket. I believe that the late 2020s will be written about in history books as the beginning of the end of American empire.
- crossroadsguy 25d agoThe worst part is, even now they are saying they will "match". That alone says they are not retaliating, they are registering a protest, maybe just not a meek protest.
- theplumber 25d agoThe politics are about compromises. China “caved” as well but that’s just one battle “lost”. In the long term the world will adjust to the new reality. As a simple example take the oil crisis from 1970s. The U.S adjusted and now is the world’s biggest producer. It will take time but in 30 years I would be surprised if Europe would still buy U.S weapons, let U.S tech services rule EU digital markets and so on.
- Zylokloto 25d agoYou underestimate how much more investment is happing in EU to be more independent of the USA. Im also pretty sure that people start looking more to China than before.
- LowTechHN 25d ago[dead]
- anon291 24d agoIndia has no trade deal. Trump announced they did without signing anything. He just makes shit up and people believe him. India still buys oil from Russia