In the 1980s, Ronald Reagan became known for his hardline stance against the Soviet Union—a strategy that ultimately contributed to the end of the Cold War. Today, we see Donald Trump adopting a similarly confrontational approach, but this time on the economic battlefield.
Reagan famously labeled the Soviet Union as an “evil empire” and launched his ambitious Star Wars program to pressure the Russians. Trump, for his part, has long railed against unfair trade practices and has imposed steep import tariffs on much of the world.
A diplomatic opening
Trump’s tough stance appears to be creating an unexpected opening. A growing number of countries have responded with a surprising counteroffer: the complete abolition of mutual import tariffs. Vietnam was among the first to propose reducing tariffs to zero. Trump referenced his “very productive” conversation with Vietnamese party leader To Lam.
Taiwan has joined this movement. President Lai Ching-te stated that tariff negotiations could begin with zero tariffs between Taiwan and the United States, citing the US-Canada-Mexico free trade agreement. Taiwan is even promising additional investments in the US, with TSMC’s announced 100 billion dollar investment touted as just the beginning.
Even within Trump’s own circle, there is movement. Elon Musk has advocated for the creation of a free trade zone between the US and Europe. Musk hopes that both Europe and the United States will agree that, in an ideal scenario, they should move toward zero tariffs, effectively establishing a free trade zone.
From trade war to global free trade?
These developments offer Trump a unique opportunity to secure his legacy. Whereas Reagan initially escalated the nuclear arms race but ultimately went down in history as a peacemaker, Trump could now seamlessly pivot from a trade war to championing global free trade.
Of course, this would require a shift in Trump’s stance. For over forty years, he has insisted that tariffs protect the American economy. His rhetoric often centers on safeguarding American jobs and reviving domestic industry. Trump’s trade advisors, such as Peter Navarro and Commerce Secretary Howard Lutnick, remain firmly committed to maintaining the tariffs. Lutnick has even categorically ruled out any delay in their implementation.
But those who know Trump understand that he has often shifted positions when it suits him. He could frame the pivot as a brilliant negotiation strategy: threaten with tariffs first, and once other countries capitulate with zero-tariff proposals, present it as a spectacular victory.
The negative reaction from financial markets to the announced tariffs is increasing pressure on Trump to find a way out. If economic indicators worsen, Trump may decide that a shift toward free trade is a more attractive option.
Ironically, Trump could, perhaps unintentionally, lead the world toward economic liberalization that surpasses anything his predecessors achieved. His trade confrontation could result in a new era of global economic integration.
Canada and Mexico have already been somewhat spared from the harshest tariffs, suggesting that Trump can be selective in his approach. This opens the door to differentiated negotiations with individual countries or trade blocs, which could eventually lead to a complex web of bilateral free trade agreements.
A possible exit strategy for Trump
Just as Reagan spoke at the Brandenburg Gate in 1987 and said, “Tear down this wall,” Trump could create a level playing field by dismantling all tariff barriers. It would be an elegant way to pivot from his often irrational criticism of unfair trade practices—not through protectionism, but by enforcing complete reciprocity.
This would allow Trump to save face while also avoiding a global economic crisis. He could claim that his tariff threats achieved precisely what he intended: fairer trade conditions for America, without the downsides of a full-blown trade war.
Reagan proved that a hawk can transform into a dove without betraying his principles. The question is whether Trump, with his famed pragmatism and instinct for self-preservation, can do the same in the realm of international trade. The chance to go down in history as the president who ushered in global free trade—rather than the one who launched a trade war—is his for the taking.
Han Dieperink is Chief Investment Officer at Auréus Vermogensbeheer. He previously served as Chief Investment Officer at Rabobank and Schretlen & Co.