Zero tariffs or zero trade deficit? This is a big question! Trump's offer to the world is outrageous

The "zero tariff" proposal from Vietnam and the European Union was outright rejected by the Trump administration, and even significant concessions from Israel could not break the deadlock... What does Trump really want? Does he genuinely want to reach an agreement? No one can say for sure.

According to Xinhua News Agency, U.S. President Trump stated on the 7th that many leaders of economies are seeking to negotiate with him. He believes that enforcing tariff policies and negotiating are not contradictory. That evening, Trump clarified his bottom line on Air Force One — zero trade deficit.

For me, a deficit is a loss. We need to achieve a surplus, or at the very least, balance our accounts.

This standard has left all trade partners at a loss. Since tariff levels are set based on the deficit rather than actual reciprocal tax rates, governments do not know what specific measures they can take to avoid severe impacts.

Deborah Elms, trade policy director at the Hinrich Foundation, stated that the problem all governments face is that no matter what they do, they cannot change the outcome of Trump's tariff calculation formula.

Whether you try hard or not, you will get this number. Our demands are so inconsistent that it is impossible to meet all of them.

Vietnam and the EU's "zero tariff" proposal was outright rejected, and even the closest ally Israel failed to gain exemption

Last week, Trump announced the implementation of a large-scale tariff policy, shaking the international trade landscape. Economies heavily impacted, such as Vietnam and the EU, quickly responded by proposing comprehensive tariff reductions to ease trade tensions, but were met with disappointment.

Vietnamese Communist Party leader Nguyen Phu Trong proposed in a letter to Trump on April 5 to eliminate all tariffs on U.S. imports and requested a delay in the implementation of 46% tariffs, but White House senior advisor Navarro clearly stated that this was far from enough.

Similarly, the "zero-for-zero" tariff proposal for automobiles and industrial goods put forward by EU Trade Commissioner Valdis Dombrovskis also failed to impress the Trump administration. Navarro called this merely a "good small start," but further concessions on value-added tax were needed. European Commission President Ursula von der Leyen has announced readiness to take countermeasures.

Even Israel, the closest trade partner of the U.S., could not break the deadlock.

According to CCTV News, on the 7th local time, Trump stated to the media after meeting with visiting Israeli Prime Minister Netanyahu at the White House that he currently has no plans to suspend tariff policies, and many leaders of economies are seeking to negotiate with him. He believes that enforcing tariff policies and negotiating are not contradictory.

Even if Israel announced the cancellation of all remaining tariffs against the U.S., it would still face a 17% tariff.

Netanyahu returned almost empty-handed. Although Israel promised to eliminate the trade deficit with the U.S., Trump indicated that this might still not be enough to lift the tariffs: "Maybe not, don't forget — we help Israel survive, we give Israel billions of dollars" in defense aid each year.

Minutes later, Trump added, "We do take care of our friends," a vague statement that is difficult to interpret

Trump's Demands Are Absurd

It is noteworthy that on the 7th local time, Steve Miran, the chief designer of the "Mar-a-Lago Agreement" and current chairman of the White House Council of Economic Advisers, elaborated on Trump's thoughts on tariffs during a speech at the Hudson Institute event, mentioning five absurd demands regarding "burden-sharing":

• Other countries must accept tariffs imposed by the U.S. on their exports without retaliating, providing revenue to the U.S. Treasury;
• Stop unfair trade practices, open markets, and purchase more goods from the U.S.;
• Increase defense spending and procure from the U.S., alleviating the burden on U.S. soldiers and creating jobs in the U.S.;
• Invest in factories in the U.S., because "manufacturing in the U.S. will not face tariffs";
• Write a "check" directly to the U.S. Treasury to help fund global public goods.

The essence of these demands is essentially asking countries around the world to unilaterally make concessions to the U.S., even directly paying "protection fees" to the U.S. Treasury, which is unprecedented in the history of international trade.

On Sunday, Trump referred to tariffs as "a wonderful thing," demonstrating his firm support for this policy tool, which surprised many leaders and investors. Although he reached many agreements through negotiations during his first term, his insistence on tariffs this time seems different from his previous negotiation style.

So far, despite a significant decline in global stock markets, including the U.S., Trump has shown no signs of concession. Some of his supporters, including Bill Ackman of Pershing Square, have begun to publicly oppose the imposition of tariffs.

No One Knows What Trump Wants

Before any agreement is reached, no one can say for sure what Trump really wants.

Alicia Garcia Herrero, chief Asia-Pacific economist at French foreign trade bank, stated that given the U.S. trade deficit with the world exceeds $1 trillion, the U.S. needs to buy more American products or open more markets to services, such as privatizing assets and selling them to American investors.

She said that for countries with the largest trade deficits, like Vietnam, these two options are "feasible but undesirable."

Everyone needs to buy more American products, but I'm not even sure if that's feasible because there isn't much produced in the U.S.

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