Donald Trump is now badly wounded. Europe can seize an advantage | Will Hutton

It's time to fashion a new global trade order without the US

The game-changing geopolitical event last week was the near collapse of the immense $29tn market in US government debt, threatening the stability of the American and global financial system and the safe-haven status of dollar assets.

The US president boasted as the collapse unfolded that world leaders were queueing to kiss his arse". Twelve hours later, he was in the same humiliatingly weak position as the then British prime minister Liz Truss found herself after her tax-slashing mini-budget" in 2022. The markets had forced him to pause for 90 days the swingeing range of reciprocal" tariffs that he announced on what he proclaimed liberation day"; instead he lowered all of them, bar that on China, to 10%.