President Donald Trump's trade efforts have helped ignite new possible trade deals for China in the absence of the United States.
Trump issued another tariff threat on Europe that will begin February 1, however, it has caused some backlash. In a post to X, European Parliament member Bernd Lange, announced they have canceled the trade deal that had been made with the U.S. until further notice. Several hours later, Trump backed down from the European tariff, and claimed he had a deal on Greenland with NATO.
Douglas Holtz-Eakin, President George W. Bush's former chief economist on the Council of Economic Advisors, told CNN that the EU trade deal was a way for Trump to get out of his damaging tariffs while saving face.
He noted that the result of Trump's recent moves, many countries are now looking to China for trade deals over the United States.
"All of which is a reconfiguration of the global trading arrangements at the expense of the United States," he said.
"China is not a particularly attractive partner for many of these countries. Until we got into this episode over Greenland. And now compared to the United States, they're looking more attractive. And it's a it's a large market. It's never been one that Western economies have been able to exploit to their full desire. But they're going to talk and see if they can make some deal with China, because it's the next best partner," Holtz-Eakin said.
"Goodness gracious me. Which one of us woke up last night and thought to ourselves, crikey, my, life is incomplete without a Greenland," Australian-born economist Justin Wolfers said.
"So, look, rupturing our place in the world. Rupturing security alliances, rupturing American alliances both militarily and economically. For Greenland. Greenland. Wow. That was on no one's bingo card, was it?
Wolfers remarked that the once stable U.S. bond market doesn't look as "secure" to international investors as it once did.
"America's position in the world and the global financial system are very much under re-evaluation. And that I think here is the real threat," he said.
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