President-elect Donald Trump views tariffs as a not-so-secret weapon — one that can be deployed 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 once dubbed himself “Tariff Man” and recently celebrated these import taxes as “the greatest thing ever invented.”
Trump’s love of tariffs — and, more specifically, the threat of tariffs — reflects a high-risk, high-reward strategy that’s designed to build maximum pressure on other nations, forcing them to come to the negotiating table.
And there is a case to be made for using tariffs as a potent bargaining chip, albeit one that risks raising prices on consumers already hurting from the high cost of living.
The United States imports about $3 trillion worth of goods each year. The specter of tariffs can create real leverage with nations whose economies would be crushed if they suddenly couldn’t sell goods to Americans because Trump just imposed a 100% tariff on them.
“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,” Stephen Moore, a former senior economic adviser during Trump’s first term, told CNN in a phone interview.
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,” said Moore, author of “The Trump Economic Miracle.”
“In his first term, President Trump instituted tariffs against China that created jobs, spurred investment, and resulted in no inflation. 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,” Karoline Leavitt, spokesperson for Trump-Vance Transition, told CNN.
