| Governments around the world are scrambling to prepare for Donald Trump's tariff onslaught. Broadly speaking, their actions can be grouped into three categories: - Preemptive moves aimed at appeasing Trump
- Preparatory moves to ready retaliation
- Holding fire and hoping for the best
Let's look first at some of the appeasers. Vietnam — which has the fourth-biggest trade surplus with the US after China, Mexico and Canada — is worried it'll be in Trump's sights, especially as his trade adviser Peter Navarro called out the country by name in Project 2025, a right-wing policy blueprint. Read More: China Exports to Vietnam Rise to Record as Supply Chains Shift Vietnam's deputy minister of foreign affairs has vowed to buy more aircraft, liquefied natural gas and other products while Prime Minister Pham Minh Chinh has emphasized the need to "remove all remaining obstacles" with the US. Similarly, South Korea and Taiwan are considering plans to boost energy imports from the US to avoid Trump's ire. Next up, those preparing to retaliate. The threat to China is longstanding, meaning its leaders have had ample time to prepare defenses and retaliatory strategies. Analysts say possible moves could include weakening the yuan, selling US Treasuries, restricting exports of key inputs such as rare earths, and targeting US companies' operations in China. Read More: Asia Factories Eke Out Growth in 2024 as Trump Tariffs Loom Along with China, Mexico and Canada have borne much of the brunt of Trump's trade threats since election day, prompting leaders from both American neighbors to publicly warn of retaliation. Outgoing Prime Minister Justin Trudeau says Canada is ready to respond with counter-tariffs. In Mexico, President Claudia Sheinbaum has warned of the hit to US inflation in response to Trump's 25% tariff threats, while also rolling out a strategy to reduce reliance on China. Then there are the wait-and-seers. Officials in Brazil appear less concerned of any US tariffs, believing the nation can ramp up sales to other markets including Asian countries in the case it's targeted. Indian officials are also allaying apprehensions for now, betting Prime Minister Narendra Modi's good relations with Trump during his first presidency will continue and they have room to lower import duties for US goods as part of any forthcoming negotiations. The European Union is probably broadly in this camp, too, though Brussels has also buttressed its ability to retaliate if necessary. Since Trump's first term, EU member states have agreed to a new set of trade powers that will allow the bloc to strike back at third countries that use economic restrictions for political retribution. Read More: EU Can't Risk Complacency Ahead of Trump, Industry Chief Says The behind-the-scenes and sometime public scramble to brace for Trump's return is merely a prelude to a renewed era of upheaval for global commerce. "Economies are just stuck between a rock and a hard place in many ways," said Frederic Neumann, chief Asia economist at HSBC in Hong Kong. "It's a very, very difficult course to navigate to appease both US demands to decouple from China, but at the same time to remain economically engaged with China." —Malcolm Scott in Sydney and Katia Dmitrieva in Hong Kong Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping. | 
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