The First 0% Trade Deal: A Potential Death Knell for the U.S. in the Trade War
If President Trump signs a 0% tariff trade deal with any of these nations—Vietnam, Taiwan, India, South Korea, the EU, Germany, Japan, Australia, Russia, or Saudi Arabia—without securing a dramatic commitment to close their trade surpluses with the U.S., it could seal America’s defeat. Here’s why: without slashing these surpluses, these countries will continue running massive deficits with China, reroute trade to the U.S., and sustain 75% of China’s $1 trillion global trade surplus—leaving the U.S. as the ultimate loser.
The Mechanism of Defeat
A 0% tariff deal sounds appealing—free trade, lower costs, open markets. But without addressing the structural imbalances, it locks in the current pattern: these countries import heavily from China (e.g., EU’s -$292B, Vietnam’s -$136.6B), process or add value, and export to the U.S. (Germany’s +$63.7B, Taiwan’s +$46.9B).
The U.S.’s high tariffs on China (54%) aim to reduce its $295.4B deficit, but if these nations keep their surpluses with the U.S. intact, they’ll simply reroute China’s goods or their own production to America, bypassing tariffs. China’s $1 trillion surplus—75% of which comes from trade with these countries and others—stays robust, while the U.S. remains the world’s dumping ground.
Example: Vietnam: With a -$136.6B deficit with China (-31.53% of its $433.32B GDP) and a +$103.8B surplus with the U.S., Vietnam reroutes $20–25B to America. A 0% U.S. tariff deal, without cutting that surplus, boosts Vietnam’s exports further—say, electronics or footwear—while it keeps importing from China. China’s surplus grows, and the U.S. deficit with Vietnam widens, not shrinks.
Example: EU/Germany: The EU’s -$292B China deficit and +$153.4B U.S. surplus (Germany’s -$85B and +$63.7B) show a similar play. A 0% deal with the EU, absent a surplus reduction, floods the U.S. with $30–40B more in rerouted machinery and autos. China still profits from EU imports, and the U.S. loses ground.
Why No Deficit Reduction Ensures U.S. Defeat
If these countries don’t commit to slashing their U.S. surpluses—say, Vietnam dropping from +$103.8B to +$50B, or Japan from +$56.8B to +$20B—they’ll maintain their trade deficits with China (e.g., India’s -$85B, South Korea’s -$37.8B) and use the U.S. as their profit outlet. The U.S.’s 54% tariff on China reduces direct imports, but these nations pick up the slack, rerouting $5–10B (Japan) to $30–40B (EU) to America. China’s $1 trillion surplus, fueled by 75% from these countries and others (e.g., ASEAN, Africa), remains intact because they don’t shift imports away from China—they just export more to the U.S.
Currency Leverage: Vietnam and Taiwan, on the Treasury’s Monitoring List, keep currencies competitive (reserves: $111.5B, $579.5B), ensuring cheap exports to the U.S. A 0% deal amplifies this without forcing balance.
Policy Choice: Japan’s 1.9% tariff on China vs. 24% from the U.S., or India’s 12% vs. 26%, shows they protect against China but exploit U.S. openness. No surplus cut means they won’t import more U.S. goods to offset.
The “10 Kings” and the Bigger Picture
These 10+ countries (Vietnam, EU, etc.) are the “kings” enabling China (the “beast”) and its economic dominance (Babylon). Their surpluses with the U.S. (+$153.4B EU, +$63.7B Germany) prop up China’s $1T surplus. A 0% deal without deficit reduction cements their role, as they keep buying from China and selling to the U.S., thwarting America’s trade war goals. Address them—force surplus cuts—and you weaken China’s network, tackling the root of the imbalance.
The U.S.’s Loss
Without drastic surplus reductions, a 0% deal hands these countries a win: Vietnam’s +$103.8B, Japan’s +$56.8B, and the EU’s +$153.4B grow unchecked, draining U.S. wealth. China’s $295.4B deficit with the U.S. may dip, but its global surplus holds as these nations reroute (e.g., Taiwan’s $15–20B). The U.S. loses jobs, industries, and leverage, defeated not by China alone, but by allies and partners choosing to exploit its market.