The tariff illusion

While Europe paralyses itself before Trump's trade threats, a disturbing pattern emerges from world capitals: the deals triumphantly announced by the White House are showing structural cracks mere months after signing. This isn't about slow implementation or technical negotiations. This is about systemic fragility.

The Korean collapse: anatomy of a bluff

October 2025. Seoul publicly declares it cannot honour the $350 billion pledged to Trump. The reason is brutally simple: that figure represents 84% of South Korea's foreign exchange reserves. "We'd go bankrupt," government officials admit. Trump wanted cash equity. Korea offers loan guarantees. No joint statement at the August summit. The "historic" July deal is already in intensive care.

The pattern is revealing. Trump had announced a "complete victory": 15% tariffs instead of 25%, in exchange for massive investments. But Seoul had negotiated from a position of structural weakness—no retaliation, no leverage, only the security equity of the alliance. The result? A commitment dependent on voluntary compliance without enforcement mechanism. Schelling would have recognised it immediately: an intrinsic credibility problem.

Japan rethinks, Europe admits the obvious

Tokyo is already in reverse mode. Sanae Takaichi, frontrunner to replace PM Ishiba, openly signals that renegotiation of the $550 billion deal "may be necessary." Japan's chief negotiator clarifies: only 1-2% will be real equity, the rest are loans on which Japan will collect interest. Not exactly the "signing bonus" Trump sold to his base.

The European Union is even more explicit. The Commission admits having no "authority to direct private actors" toward the promised $600 billion in investments. A trade expert from ODI Europe says it without circumlocution: "These commitments can only be aspirational." Energy experts call the $750 billion in LNG purchases "completely unrealistic"—the numbers are "beyond wild."

The one deal that holds: the UK and the secret of private skin in the game

There's one significant exception in the landscape: the United Kingdom. The September 2025 US-UK investments (£150bn to UK, £100bn to US) are materialising. Microsoft: £22bn. Google: £5bn. Nvidia: massive GPU deployment. Blackstone: £100bn over ten years.

Why does this hold while others crumble? Different structural mechanism. These aren't governments promising public money they don't have. These are private companies—Microsoft, Google, Nvidia—autonomously deciding where to invest their own capital. They have real skin in the game. English legal infrastructure, City liquidity, regulatory agility in fintech: these are variables influencing genuine investment decisions, not "signing bonuses" negotiated under threat of tariffs.

The mechanism of structural fragility

What unites the deals in crisis? Three systemic characteristics:

Commitment without enforcement: Framework agreements, not binding accords. Each country interprets differently what it promised. The Trump administration threatens "retaliation" if investments don't materialise, but this threat is itself barely credible—further tariffs would damage the American economy as much as partners'.

Incentive misalignment: Trump wants cash equity the US government controls. Partners want loans with guarantees, gradual investments, control over returns. Japan says "profits will be split according to contribution." Trump said "90% to American citizens." Both are right according to their interpretation. Nobody put it in writing.

Inevitable political backlash: The Japanese government postponed the deal announcement until after parliamentary elections. It emerged "badly bruised." Korean citizens are furious over images of compatriots shackled by ICE. The European Commission struggles to sell the deal to member states, whose cooperation is essential to materialise promises. These agreements aren't just economically fragile—they're politically unsustainable.

Europe victim of its own excessive seriousness

Here emerges the tragic paradox of Europe's position. While Trump announces "victories" based on numbers already collapsing, Europe treats those threats as real and binding. European automotive industry paralysis sets in. Governments desperately seek the "third way" between US and China. Companies shift production fearing tariffs that may never materialise.

Europe is suffering real damage—uncertainty, delayed investments, erosion of confidence in the single market—whilst negotiating with a system of agreements that partners themselves are already renegotiating. Seoul says it openly: we can't pay. Tokyo signals renegotiation. Brussels admits the numbers are aspirational.

What not to do (via negativa applied)

The systemic lesson for Europe isn't "find the right deal with Trump." It's recognising the pattern of structural fragility and stopping operating as if these frameworks were credible commitments.

Don't paralysis over threats proving hollow the moment they're tested. Trump's deals have weak enforcement mechanisms by design—they depend on voluntary compliance from governments already discovering they cannot honour promises.

Don't seek the "third way" when one pole (US) is negotiating agreements collapsing within months. Building European strategic autonomy means stopping reacting to every Trump threat as if it were a credible commitment.

Don't withhold investments awaiting the storm to pass. The UK grasped that the moment of US trade fragility is an opportunity: it attracted real American capital whilst Trump was busy negotiating unenforceable "signing bonuses" with Seoul and Tokyo.

The test of coming months

If this pattern of structural fragility is correct, we should observe:

• Continued "clarifications" and "renegotiations" of deals Trump announced as historic
• Growing domestic political resistance in partner countries (already visible in Japan and Korea)
• Materialisation only of private investments with real skin in the game (UK model), not governmental "funds"
• Escalation of Trump threats toward partners "not respecting commitments"—threats that won't materialise into real tariffs because they'd damage the US economy too much

Europe has a choice. It can continue treating these frameworks as binding agreements and paralysis itself. Or it can recognise the mechanism of systemic fragility, stop reacting to every announcement as if credible, and focus on building its own capacity to attract real investments—not governmental promises under threat of tariffs.

The United Kingdom, outside the Union, has already chosen. It saw American capital seeking a safe Atlantic harbour and offered infrastructure, regulatory agility, and legal certainty. Continental Europe, meanwhile, waits for Trump to tell it which tariffs to pay to avoid tariffs that may never arrive.

This is the real cost of European excessive seriousness: suffering the damage of threats proving hollow the very moment they're tested.