D is indeed the correct answer. Notice the last sentence of the commentator's words says that "if every country acted according to this theory, no country would ever trade with any other." Therefore, he assumes that countries that act according to the trade retaliation theory would lead to a "domino effect" of sorts, resulting in no trade all (bad).

So what MUST be true for such situation to happen? In order for the (gloomy) prediction to take form, out of any two countries, at least one of them must have some market closed to the other. If this is the case, and the other country retaliates, it will start the "domino effect" described in the question (Country A has some market blocked from country B--> country B retaliates to pressure country A--> the retaliation doesn't work and neither country is trading).

What if we NEGATE statement D? What if, for any two countries we look at, both have ALL of their markets open to each other? In such case, trade retaliation is impossible! Trade retaliation occurs only when, in the initial state of things, one country has some market closed to another. If all markets are open, then there's no need to retaliate, is there? Just keep on trading happily ever after!

Therefore, we understand that answer D is the correct one. If it weren't true, then the entire argument falls apart! This is exactly the case when we NEGATE the CORRECT answer in "Find the Assumption" type CR questions (thanks Manhattan Prep!).

Hope this helps!