Seeking shelter from Trump's fury, U.S. trade partners reach deals with each other

WASHINGTON (AP) — Bullied and buffeted by President Donald Trump’s tariffs for the past year, America’s longstanding allies are desperately seeking ways to shield themselves from the president’s impulsive wrath.

U.S. trade partners are cutting deals among themselves —- sometimes discarding old differences to do so — in a push to diversify their economies away from a newly protectionist United States. Some European governments and institutions are reducing their use of U.S. digital services such as Zoom and Teams.

Central banks and global investors are dumping dollars and buying gold. Together, their actions could diminish U.S. influence and mean higher interest rates and prices for Americans already angry about the high cost of living.

Last summer and fall, Trump used the threat of punishing taxes on imports to strong-arm the European Union, Japan, South Korea and other trading partners into accepting lopsided trade deals and promising to make massive investments in the United States.

But a deal with Trump, they’ve discovered, is no deal at all.

The mercurial president repeatedly finds reasons to conjure new tariffs to impose on trading partners that thought they had already made enough concessions to satisfy him.

Just months after reaching his agreement with the EU, Trump threatened new tariffs on eight European countries for opposing his attempts to seize control of Greenland from Denmark – though he quickly backed down. And last month, he said he’d slap 100% tariffs on Canada for breaking with the United States by agreeing to reduce Canadian tariffs on Chinese electric vehicles.

“Our trading partners are discovering that the largely one-sided deals they concluded with the U.S. provide little protection,’’ said former U.S. trade negotiator Wendy Cutler, senior vice president at the Asia Society Policy Institute. “As a result, trade diversification efforts by our partners are on turbo charge, looking to reduce dependence on the U.S.’’

Trump supporters such as Paul Winfree, who was deputy director of the White House Domestic Policy Council during Trump’s first term, are wary of the relative decline in U.S. Treasury note holdings by foreign central banks and view the national debt as a vulnerability rivals would like to exploit.

Winfree, CEO of the Economic Policy Innovation Institute, a think tank, said that some of Trump's advisers do not feel America has fully benefited from the dollar's status as the world's dominant currency.

“But the fact remains that every other country is jealous of our status, and many of our adversaries would love to challenge the U.S. dollar and Treasuries,” he said.

White House spokesman Kush Desai insists America's standing on the global stage has not been diminished.

“President Trump remains committed to the strength and power of the U.S. Dollar as the world’s reserve currency," he said.

The most eye-opening deal so far has been the pact announced last week between the 27-country EU and India, the world’s fastest growing major economy. Negotiators had been at it for nearly two decades before they closed the agreement.

Likewise, an EU trade deal announced two weeks ago with the Mercosur nations of South America took a quarter century of negotiation. It will create a free-trade market of more than 700 million people.

“Some of these deals have been in the works for quite some time,’’ said Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics and former chief economist at the International Monetary Fund. “The pressure from Trump made them more eager to accelerate the process and reach agreement.’’

EU exporters were jubilant over the India deal. VDMA, a group of European machinery and plant engineering companies, welcomed lower Indian tariffs on machinery.

“The free trade agreement between India and the EU brings much needed oxygen to a world increasingly dominated by trade conflicts,” VDMA’s executive director, Thilo Brodtmann, said in a statement. “With this agreement, Europe is sending a clear signal in favor of rules-based trade and against the law of the jungle.”

On Monday, Trump went on social media to announce his own deal with India. The U.S., he posted, would reduce tariffs on Indian imports after India agreed to stop buying oil from Russia, which has used the sales to fund its four year war in Ukraine.

The president said that India would reduce its tariffs on American products to zero and buy $500 billion worth of American products. Trade lawyer Ryan Majerus, a partner at the King & Spalding and a trade official in the Biden administration and during Trump's first term, said that businesses and legal analysts were awaiting official White House documents spelling out details of the deal.

Trump is banking on there being limits to other countries’ ability to pull away from the United States. America has the world’s biggest economy and consumer market. “We have all the cards,’’ Trump told Fox Business this month.

Countries like South Korea, dependent on America’s market and military protection, can’t afford to ignore Trump’s threats. On Monday, for example, the president said he was increasing tariffs on South Korea goods because the country’s legislature has been slow to approve the trade framework announced last year. On Tuesday, the country’s Finance Ministry responded by saying its chief, Koo Yun-cheol, would push lawmakers to quickly approve a bill to invest $350 billion as promised in the agreement.

"The U.S was trying to identify a counterpart that would find it difficult to refuse U.S. demands outright, given the depth of its economic and security ties,” said Cha Du Hyeogn, an analyst at South Korea’s Asan Institute for Policy Studies.

Or consider Canada, which sends 75% of its exports to its southern neighbor. “Canada and U.S. will always be tightly linked through international trade,” said Obstfeld, a professor at the University of California, Berkeley. “We’re talking about adjustments more or less on the margin.’’

But the world’s growing rejection of Trump’s policies is already having an impact, driving down the value of the dollar, long the currency of choice for global commerce, to its lowest level since 2022 last week versus several competing currencies.

Syracuse University political scientist Daniel McDowell, author of the book “Bucking the Buck: U.S. Financial Sanctions and the International Backlash against the Dollar,” sees a vibe shift under Trump: Foreign countries and investors want to reduce their exposure to the United States, which has moved from a source of security and stability to a driver of instability and unpredictability under Trump.

“Trump has shown that he is willing to use foreign countries’ economic dependence on the U.S. as leverage against them in negotiations,” McDowell said. “As global perceptions of the US are changing, it is only natural that investors — public and private alike — are reconsidering their relationship with the dollar.”

Kurtenbach reported from Bangkok. Associated Press videographer Yong Jun Chang in Seoul and AP Business Writer Kelvin Chan in London contributed to this report.

President Donald Trump speaks during an event in the Oval Office of the White House, Friday, Jan. 30, 2026, in Washington. (AP Photo/Evan Vucci)

NEW YORK (AP) — This is not the run-up to the midterm elections that Republicans wanted.

A year and a half after winning the White House by promising to lower costs and end wars, Donald Trump is a wartime president overseeing surging energy costs and an escalating overseas conflict that many in his own party do not like.

He offered little clarity to a nation eager for answers this week during a prime-time address from the White House, his first since the U.S. and Israel attacked Iran more than a month ago, simultaneously suggesting that the war was ending and expanding.

“Thanks to the progress we’ve made, I can say tonight that we are on track to complete all of America’s military objectives shortly, very shortly,” Trump said. “We’re going to hit them extremely hard over the next two to three weeks.”

Trump's comments come roughly six months before voters across the nation begin to cast ballots in elections that will decide control of Congress and key governorships for Trump’s final two years in office. For now, Republicans, who control all branches of government in Washington, are bracing for a painful political backlash.

“You’re looking at an ugly November,” warned veteran Republican pollster Neil Newhouse. “At a point in time when we need every break possible to hold the House and Senate, our edge is being chipped away.”

It’s hard to overstate how dramatically the political landscape has shifted.

At this time last year, many Republican leaders believed there was a path to preserve their narrow House majority and easily hold the Senate. Now they privately concede that the House is all but lost and Democrats have a realistic shot at taking the Senate.

Republicans are also struggling to coalesce around a clear midterm message on Iran.

The Republican National Committee has largely avoided the war in talking points issued to surrogates over the last month. The leaders of the party's campaign committees responsible for the House and Senate declined interview requests. Many vulnerable Republican candidates sidestep the issue, unwilling to defend or challenge Trump publicly.

The president remains deeply popular with Republican voters, and he has vocal supporters like Sen. Lindsey Graham of South Carolina.

“That was the best speech I could’ve hoped for,” he wrote on social media after Trump's address on Wednesday evening. Graham said Trump “gave the American people a clear and coherent pathway forward.”

Trump made little effort to sell the conflict to Americans before the initial attack. Five weeks later, at least 13 U.S. service members have been killed and hundreds more injured. Thousands more troops have converged on the region, and the Pentagon requested $200 billion in new funding.

The Strait of Hormuz, a key passage for a fifth of the world’s oil, remains closed. The average price for a gallon of gasoline in the U.S. was $4.08 on Thursday, according to AAA, almost a full dollar higher than on President Joe Biden's last day in office.

On Wednesday, Trump insisted that gas prices would fall quickly once the war concluded but offered no solution for reopening the Strait of Hormuz. Instead, he invited skeptical U.S. allies to do it themselves.

He insisted that the war would be worth it.

“This is a true investment in your grandchildren and your grandchildren’s future,” Trump said. “When it’s all over, the United States will be safer, stronger, more prosperous and greater than it has ever been before.”

Former Rep. Marjorie Taylor Greene, a Georgia Republican who was once among Trump's most vocal allies in Congress, lashed out against his Iran policy.

“I wanted so much for President Trump to put America First. That’s what I believed he would do. All I heard from his speech tonight was WAR WAR WAR,” she wrote on social media. “Nothing to lower the cost of living for Americans.”

About 6 in 10 U.S. adults say the U.S. military action in Iran has “gone too far,” according to AP-NORC polling from March. Roughly a third approve of how he’s handling Iran overall.

The possibility of sending U.S. forces into Iran also appears politically unpalatable.

About 6 in 10 adults are “strongly” or “somewhat” opposed to deploying U.S. troops on the ground to fight Iran. That includes about half of Republicans. Only about 1 in 10 favor deploying troops.

At the same time, Trump’s approval ratings have remained consistently weak. About 4 in 10 Americans approve of how he’s handling the presidency, roughly in line with how it’s been throughout his second term.

Republican strategist Ari Fleischer, a senior aide in former President George W. Bush’s administration, acknowledged that Trump has not received the polling bump in this war that Bush got after invading Iraq.

Bush, of course, worked to build public backing for the Iraq War before going in. Immediately after the 2003 invasion, Bush's popularity soared, as did the stock market.

Public sentiment and the economy soured only after the conflict stretched on. It ultimately spanned more than eight years, spawning a generation of anti-war Republicans — and sowing the seeds of Trump's “America First” foreign policy.

“My hope is that the Trump experience is the exact opposite of the Bush experience,” Fleischer said.

He said Trump must win the war decisively and quickly to avoid a further backlash, saying there could be a “very significant political upside if things end well, oil comes down and markets rally.”

Fleischer added that Trump's actions will matter much more than his words.

“Ultimately, he is not going to get judged on his persuasion or his explanations or his assertions, he’s going to get judged on results,” he said.

Associated Press writer Linley Sanders in Washington contributed to this report.

In this image made with a long exposure, President Donald Trump speaks about the Iran war from the Cross Hall of the White House on Wednesday, April 1, 2026, in Washington. (AP Photo/Alex Brandon, Pool)