President-elect Donald Trump’s Love of Tariffs: A High-Risk, High-Reward Strategy
President-elect Donald Trump views tariffs as a not-so-secret weapon to pressure friends and foes alike to address issues from drug trafficking and illegal immigration to threats to the dominance of the US dollar. Trump has dubbed himself “Tariff Man” and recently celebrated import taxes as “the greatest thing ever invented.”
Trump’s love of tariffs reflects a high-risk, high-reward strategy designed to build maximum pressure on other nations, forcing them to come to the negotiating table. The United States imports about $3 trillion worth of goods each year, and the specter of tariffs can create real leverage with nations whose economies would be crushed if they suddenly couldn’t sell goods to Americans.
Stephen Moore, a former senior economic adviser during Trump’s first term, believes that tariffs can be used as a negotiating tool. “If we couldn’t trade with Mexico, we would survive. But it would be the end of the world for Mexico. That does give us leverage. And leverage is everything when you’re negotiating,” he said.
Moore, who used to unabashedly favor free trade, said Trump convinced him that tariffs can be used as a negotiating tool. “It’s a dangerous game, one that could work,” he said.
Trump’s tariffs against China in his first term resulted in no inflation and created jobs, according to Karoline Leavitt, spokesperson for Trump-Vance Transition. “President Trump will work quickly to fix and restore an economy that puts American workers by re-shoring American jobs, lowering inflation, raising real wages, lowering taxes, cutting regulations, and unshackling American energy,” she said.