US allies struggle to respond as Trump’s trade war forces a global recalibration

US President Donald Trump

US President Donald Trump’s aggressive trade war has put America’s closest allies in a bind, forcing them to choose between retaliating and risking escalation, or holding back in hopes of securing exemptions or future trade deals. As Trump prepares to implement sweeping “reciprocal tariffs” on April 2, countries around the world are scrambling to figure out how to influence his decisions — without making things worse, the Wall Street Journal reported.

The European Union and Canada have taken a confrontational approach, imposing or threatening tariffs on US products like whiskey, motorcycles, and aluminum in response to Trump's blanket duties on steel and North American imports. Meanwhile, Mexico and the UK have opted for restraint, banking on diplomacy and cooperation to stay in the administration’s good graces.

Retaliate or accommodate?

“There is a limit to matching these tariffs dollar for dollar given that our economy is one-tenth the size of the United States,” Canadian Prime Minister Mark Carney said last week, acknowledging the challenge smaller economies face in this high-stakes standoff.

Canada, in the midst of an election campaign shaped by how parties plan to manage Trump, has already seen its measured retaliation provoke further tariffs. Trump recently doubled tariffs on Canadian steel and aluminum and threatened 200% duties on European alcohol products after both regions pushed back.

“We also have to show our teeth because it’s the only language that this Trump administration is basically understanding,” said Anna Cavazzini, a German member of the European Parliament. Still, the EU paused its planned April 1 counter tariffs, delaying them to mid-April amid ongoing talks with US officials.

Mixed tactics, same result

Mexico, which sends 80% of its exports to the US, has pursued a conciliatory path, transferring 29 drug kingpins to US custody and showcasing results in curbing drug flows. President Claudia Sheinbaum has worked to maintain respectful ties with Trump, even as new tariffs on Mexican goods loom.

“How do you maintain cooperation if this wrecks your economy?” one Mexican official asked. “Politically, it’s not sustainable to be close to an administration that hits you with a recession.”

Similarly, the UK under Prime Minister Keir Starmer has avoided direct confrontation, emphasizing diplomacy and shared strategic goals. Starmer even delivered a personal invitation from King Charles for a Trump state visit, a gesture met with praise by the president. Britain hopes to finalise a US trade deal and act as a transatlantic bridge on issues like Ukraine and defence.

Confusion fuels global uncertainty

Trump’s comments have only added to the uncertainty. “I may give a lot of countries breaks,” he said this week, reinforcing the idea that decisions are made ad hoc rather than through a consistent strategy.

China’s reaction has been muted, focusing on symbolic measures like tariffs on U.S. agriculture and WTO complaints, likely in hopes of brokering a broader deal.

“The reality is, nobody knows the best way to deal with Trump,” said Barry Appleton, an international trade lawyer. “Do you poke the bear? Or do you wait for others to be eaten first?”

As Trump’s “Liberation Day” tariff rollout nears, governments worldwide are weighing those very questions — and bracing for the consequences either way.