What is the strategy behind the US tariff's?

What is really behind the tariffs in Trump’s trade plan?

This article looks at how the Trump administration is using tariffs in different ways, how this might affect global trade, and what may happen next. It also explains the types of tariffs involved and outlines a likely pathway the administration may take in the months ahead.

A different approach to global trade

The Trump administration’s tariff policy marks a big shift from the usual way countries do trade. Most modern trade agreements try to lower or remove tariffs, allowing goods to move more freely across borders. But this new plan adds tariffs instead. It includes a flat 10% tariff on all imports and extra tariffs for countries with big trade surpluses with the US.

This move puts pressure on many of America’s trading partners. They now face tough choices—either make new trade deals with the US or deal with the costs of these tariffs. It’s a bold strategy that’s already changing how global trade works.

A focus on power and control

This trade approach is not just about economics—it’s also about power. The US government is showing it can quickly turn tariffs on or off, giving it more control in talks with other countries. The short “pause” on some tariffs on 9 April showed that the White House can use tariffs as both a stick and a carrot. Some countries, like China and Canada, decided to fight back with their own tariffs. Others have agreed to start talks.

This kind of tariff policy also seems to be about reminding everyone who is in charge. The US is making it clear that it wants better deals, more local production, and fewer imports that hurt American jobs.

How other countries are reacting

The global response to these tariffs has been mixed. Countries like South Korea and Japan are now negotiating with the US to avoid higher costs. Others, like China and Canada, are standing firm and fighting back. This division shows how powerful the new tariff policy is—it’s changing the way countries interact with the US.

But there’s also risk. Some countries might grow tired of dealing with constant changes and may look for new trade partners elsewhere. That could weaken America’s role in the global economy over time.

Five types of tariffs in play

The Trump administration isn’t using just one kind of tariff—it’s using several, each with its own goal:

1. Tariffs used for leverage

Some tariffs are used to pressure other countries to take action on issues not directly related to trade, like immigration or drug control. These are often put in place suddenly, and taken away just as fast once the goal is met.

2. Country-specific tariffs

These target key countries—especially China, Canada and Mexico. With China, the goal is to address a big trade gap and larger political competition. Tariffs on Canada and Mexico are more about protecting American interests under the US-Mexico-Canada Agreement (USMCA). These tariffs have not been paused, showing how serious the US is about these specific relationships.

3. Industry-focused tariffs

Some tariffs are aimed at boosting US industries such as steel, aluminium and car production. These are meant to make it more appealing for companies to make products in the US instead of overseas. There is talk that more sectors, like pharmaceuticals, could be added.

4. “Fairness” or reciprocal tariffs

These are aimed at countries that sell much more to the US than they buy. The idea is to push these countries to open up their markets more to US goods. Some of these tariffs have been paused to give room for talks.

5. Across-the-board tariffs

A general 10% tariff has been added to all imports, including from countries that don’t have a trade surplus with the US. This appears to be mainly about raising money for the US government and generating new leverage points.

What comes next: Five possible steps

Looking at what the administration has done so far, we can outline five key steps likely to shape the next phase of this strategy:

1. Making better trade deals

The US wants its trading partners to agree to new deals that are seen as fairer. By applying heavy tariffs, the administration is pushing countries to come to the table quickly. Talks with many countries are already happening, and more are expected.

2. Supporting US manufacturing

Tariffs are meant to protect US industries from cheap foreign competition. This may help bring some manufacturing jobs back home. However, businesses want clear and stable rules before they make big investments in new American factories.

3. Challenging China

The US is focused on changing its trading relationship with China. There are concerns about trade imbalances, unfair practices, and intellectual property theft. This is not just about trade—it’s part of a bigger rivalry between two global powers. But a tough stance on China could cause problems if it leads to a long conflict.

4. Raising money

The administration sees tariffs as a way to bring in revenue. A 10% tariff on all imports could earn trillions of dollars over time. This money could help lower the US deficit or fund other programmes. However, this will only work if Americans keep buying imported goods.

5. Cutting prices at home

Trump has said that more local production will mean more competition and lower prices. But many economists warn that tariffs often make imported goods more expensive. This could lead to higher prices for US consumers, especially those with lower incomes.

Conclusion

The Trump administration’s use of tariffs is a big change from past trade policy. By putting pressure on other countries and protecting American industries, the US hopes to get better deals and grow its economy. However, this strategy also brings risks. Higher prices, trade fights, and global pushback could limit its success.

While the final outcome is still unclear, it is clear that tariffs are now a key tool in US foreign and economic policy. How other countries respond—and whether this approach leads to lasting change—will shape global trade for years to come.