America’s trade allies are trying to shield themselves from President Donald Trump’s tariff threats by negotiating more arrangements with one another, according to an Associated Press report published Feb. 3. The story describes longstanding partners as “bullied and buffeted” during the past year and says that, rather than relying on deals with the United States that can be undermined by new tariff rounds, governments and institutions are seeking other pathways to reduce exposure to the U.S. market.
The AP report, written by Paul Wiseman, says the push for diversification includes moves such as European governments and institutions reducing reliance on U.S. digital services like Zoom and Teams. It also points to broader financial and monetary adjustments that, it says, could reduce U.S. influence and feed into higher interest rates and prices for Americans already dealing with the high cost of living.
In the report’s account, the urgency is tied to how Trump’s tariff approach has shifted after partners agreed to earlier terms. The AP says Trump “used the threat of punishing taxes on imports” to strong-arm the European Union, Japan, South Korea and other partners into accepting trade deals and promising investments in the United States. It adds that partners are finding those agreements can be followed by new tariff threats, sometimes soon after concessions are made.
Wendy Cutler, a former U.S. trade negotiator and senior vice president at the Asia Society Policy Institute, is quoted by AP as saying, “Our trading partners are discovering that the largely one-sided deals they concluded with the U.S. provide little protection,” and adding, “As a result, trade diversification efforts by our partners are on turbo charge, looking to reduce dependence on the U.S.” The AP report places that view alongside concerns from some Trump allies about the vulnerability that could come from shifts in foreign holdings of U.S. Treasurys.
The report also includes an example of new deal-making between major U.S. partners that has accelerated even as U.S.-related pressure continues. It says the “most eye-opening” agreement was a pact announced last week between the 27-country European Union and India, concluded after nearly two decades of negotiations. It adds that an EU trade deal announced two weeks earlier with the Mercosur nations of South America took about a quarter century and is expected to create a free-trade market for more than 700 million people.
AP reports that some European industry groups welcomed the EU-India pact as signaling a preference for rules-based trade. VDMA, a group of European machinery and plant engineering companies, is quoted through its executive director, Thilo Brodtmann, saying: “The free trade agreement between India and the EU brings much needed oxygen to a world increasingly dominated by trade conflicts,” and that it would signal “in favor of rules-based trade and against the law of the jungle.”
The AP account also describes Trump publicly announcing an India-related arrangement, saying the U.S. would reduce tariffs on Indian imports after India agreed to stop buying oil from Russia. It quotes trade lawyer Ryan Majerus, a partner at King & Spalding who previously served as a trade official in the Biden administration and during Trump’s first term, as saying businesses and legal analysts were waiting for official White House documents spelling out the details.
For South Korea and Canada, the report portrays tariff leverage as operating through both economic dependence and political timelines. It cites the AP report saying Trump increased tariffs on South Korea goods because the country’s legislature moved slowly in approving a trade framework announced last year, and that South Korea’s Finance Ministry responded by saying the finance minister, Koo Yun-cheol, would push lawmakers to quickly approve a bill to invest $350 billion as promised in the agreement. The AP report then quotes Cha Du Hyeogn, an analyst at South Korea’s Asan Institute for Policy Studies, as saying the U.S. was trying to identify a counterpart that would be difficult to refuse.
The AP report says Canada sends 75% of its exports to the United States and quotes Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics and former chief economist at the International Monetary Fund, saying, “Canada and U.S. will always be tightly linked through international trade,” and that changes would likely be “on the margin.” It also says the dollar has been weakening, reporting that the dollar’s value has dropped to its lowest level since 2022 last week versus several competing currencies, while partners move to deepen trade ties outside the U.S.
The report contrasts those signals with a White House message defending U.S. global economic standing. Kush Desai, a White House spokesman, is quoted by AP saying, “President Trump remains committed to the strength and power of the U.S. Dollar as the world’s reserve currency.” The AP report then includes analysis from others who argue investors and foreign governments are adjusting their exposure to the United States under Trump. Daniel McDowell, a political scientist at Syracuse University and author of “Bucking the Buck: U.S. Financial Sanctions and the International Backlash against the Dollar,” is quoted saying Trump has used economic dependence as leverage and that “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.”
Finally, the AP report situates the diversification trend as both a diplomatic effort and a risk-management response to uncertainty. It portrays partners as accelerating negotiations that take years—such as the EU-India and EU-Mercosur deals—while also suggesting that tariff-driven pressure may not produce stability even when partners agree to earlier terms.