Mid-November, under pressure from polling data showing American consumers increasingly unhappy about grocery prices, Trump cancelled tariffs on a range of imported food products, including coffee and beef. A small tactical retreat in the middle of the largest trade war in living memory.
This article was originally published on 19 November 2025 on The Brief at sebsauerborn.com.
The retreat got less coverage than it deserved. Not because food tariffs are uniquely important, but because of what it revealed about the political economy of protectionism: tariffs are easy to announce and extremely painful to sustain.
This is worth understanding clearly, because the trade war is not over. It has barely begun.
What Trump's Tariff Programme Actually Is
Trump returned to the White House in January with a protectionist agenda that is more ambitious than his first term. On April 2, which he called Liberation Day, he imposed 10% baseline tariffs on imports from almost every country in the world, with higher country-specific rates on top of that for the most targeted nations.
China bore the brunt. At the peak of the escalation, tariffs on Chinese goods reached levels that effectively priced many Chinese products out of the US market entirely. China retaliated with its own tariff package. Both sides escalated. A mid-year truce eased some of the pressure, but the structural confrontation remains fully intact.
The European Union has not been spared. Trump has described the EU as a declining bloc that is "drowning in illegal migration and fixated with green." The EU has retaliated with targeted tariffs on American goods, chosen to maximise political pain in Republican-leaning states. Kentucky bourbon. Florida orange juice. Wisconsin motorcycles.
The WTO dispute resolution system, which was supposed to govern exactly these kinds of conflicts, is functionally paralysed. The US blocked appointments to the WTO Appellate Body during the first Trump term. That blockage has not been resolved. The referee has left the pitch.
What This Means for European Businesses
For my clients in Germany, Austria, and Switzerland, the trade war is not an abstract geopolitical story. It is landing in their order books.
German exporters, particularly in automotive and industrial machinery, are facing a US market that is simultaneously their largest and most lucrative export destination and one that is now subject to a 25% tariff on cars and a range of other levies on industrial goods.
For medium-sized German exporters, the Mittelstand companies that are the backbone of the German economy, the situation is more acute. They do not have the resources to build US manufacturing operations. They face a choice between absorbing the tariff cost, raising prices and losing market share, or exiting the US market.
Many are choosing the third option. And that is a structural shift in the German export economy that will have long-term consequences.
The China Dimension
The part of the trade war that gets the most attention is also the part where the stakes are highest.
China is simultaneously America's largest trading partner and its most serious geopolitical rival. The trade war is not really about trade. It is about technology, about supply chains, about which country controls the critical inputs for the next century of industrial production.
Semiconductors. Rare earth minerals. Battery technology. Artificial intelligence infrastructure. These are the real battlegrounds.
In November, China suspended its ban on exports of gallium, germanium, antimony, and other materials used in semiconductor manufacturing. This was a tactical concession, a small signal of willingness to negotiate. It did not change the fundamental picture.
What Smart Entrepreneurs Are Doing
I talk to entrepreneurs across the DACH region every week. The ones who are navigating this environment well share certain characteristics.
They are not waiting for political resolution. The entrepreneurs who are waiting for clarity are the ones who are falling behind.
They are diversifying their customer base geographically. Heavy dependence on the US market, or on Chinese manufacturing, is a structural vulnerability. The companies building resilient revenue streams across multiple geographies, including markets in Southeast Asia, the Middle East, and Africa, are better positioned.
They are reviewing their supply chains with a level of rigour that was not necessary ten years ago.
And many of them are reviewing their personal financial and jurisdictional structures. When the regulatory and geopolitical environment is this volatile, having your personal wealth and business assets concentrated in a single jurisdiction is an unnecessary risk.
The Food Tariff Retreat: A Signal Worth Reading
The retreat happened because the political pain of consumer price inflation overrode the ideological commitment to protectionism. That is how tariffs always end, eventually: not through principled reversal, but through the accumulation of political cost.
The lesson for anyone who has been worried about the trade war's impact on their business is not to relax. The lesson is that political constraints will eventually force pragmatism, but the disruption between now and then can be very significant, and the businesses that survive it are the ones that planned for it.
Hope is not a strategy. A diversified, internationally structured business is.
Work with Sebastian
The trade war is reshaping the business environment for European exporters, investors, and entrepreneurs. If you want to think through how your structures, supply chains, and geographic exposure are positioned for the next five years of this, let's have a conversation. Book a consultation.