Governments have been falling over one another to offer concessions to United States President Donald Trump as his August 1 tariff deadline looms. On Sunday, the US president scored his biggest victory to date, as European Union chief Ursula von der Leyen, like the leader of a vassal state paying homage to an emperor, travelled to Trump’s private golf course in Scotland to offer him tribute.

It came in the form of an entirely one-sided tariff pact in which Brussels accepted a huge tariff hike and pledged to spend hundreds of billions of dollars on US fossil fuels and military products.

The pact has changed the balance between two of the largest economic powers in the world. The EU has simply rolled over without a fight. French Prime Minister Francois Bayrou described it as a “dark day” for the union, while a European diplomat bemoaned by saying “those who don’t hang together get hanged separately.”

The economic impact on the rest of the world is likely to be worse still. Trump has declared economic war on friends and foes alike. Many countries are facing higher tariffs than the EU and are less capable of defending themselves. By giving in, Brussels has made it harder for other countries to stand firm.

A 40 percent tariff on Laos or 36 percent on Cambodia, for example, will be devastating to the export industries which US corporations encouraged them to build in recent decades. And without a united front, other countries are reluctantly coming to the table.

Last week, Trump announced a deal with the Philippines for 19 percent tariffs on all goods exported to the US and no tariffs on imported US goods; it was unclear if Manilla had fully agreed to the arrangement before the US president made it public. Indonesia’s deal is even worse, with the country forced to give up controls on its critical mineral exports and aspects of its emerging digital sector – both of which are critical to its economic development. For Brazil, US demands go beyond the economic realm, with Washington going as far as trying to interfere in the prosecution of former President Jair Bolsonaro.

Advertisement

While the provisions of different trade deals vary, they all follow the same strategy: Bullying governments to change their rules and regulations in favour of US corporate interests, especially those of oligarchs who surround the president.

Trump’s trade negotiations style might be highly erratic, but his is a clear-cut end goal: To upend the world economic system, replacing rules which were already unfair with the absolute dominance of the biggest bully.

The immediate impact of this restructuring will be bad for the countries that submit to it, but this won’t be the end of the story. By giving Trump what he wants, they have strengthened his hand, and he will be back for more.

Already, the EU has little clarity around a range of additional tariffs the US president might bring in and how they will affect the “deal” that’s been made. Canada ditched its digital services tax on Big Tech to get a deal, only to be hit by higher tariffs. The Philippines now faces a higher tariff than it did in April, despite making concessions. And the UK thought it had a deal on steel, only to discover it didn’t, really.

There’s no fairness in any of this. The only way out is to stand up to Trump; he does not respect weakness.

As a minimum, for countries that have signed a deal, that means implementing as little as they can. Governments that can retaliate should do so. That does not necessarily mean matching tariff for tariff, a policy which could inflict serious self-harm, but rather using the tools that show their strength best.

The EU has ample power to challenge the US services trade, and should have retaliated by limiting US corporate access to, for example, government contracts, financial markets and intellectual property protection.

In failing to take such action, the EU showed a profound misunderstanding of the moment we’re in. Von der Leyen seems to think Trump is a temporary anomaly who can be contained while we wait for a resumption of business as usual in four years.

But in Europe and the US, the public has had enough of a corporate-dominated global economy. There’s no return to that world. Retaliatory policies like the ones mentioned above can not only maximise the pain directed at Trump’s oligarchic friends, but they can also help unwind the power of the monopolies which are at the heart of our deeply unfair, unsustainable economy.

This last point is important. Because if we want Trump gone, as millions of Americans do, we will not get there by handing him unnecessary victories. Trump won power by building a bridge between those angry at a corporate-dominated economy and the corporate barons themselves. It was an impressive feat. But the alliance will only last as long as he’s winning.

Advertisement

The question now is how governments can best protect their economies long-term, and that must come through regaining sovereignty, not handing it over to the bully in the White House. What’s more, such action can show Trump for the corporate lobbyist he really is and lay a path to his eventual downfall.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.