Trump's Acts Serve Political Ends Even If They Lack Economic Logic

We must view his tariffs from an economic statecraft lens and use this upheaval to effect reforms

- NITIN PAI

Some of Donald Trump's reasons for imposing tariffs on countries are understandable, even if their fitness for the purpose is debatable. Demanding that Mexico impose tighter border controls, Europe raise defense expenditure and China prevent fentanyl smuggling or else suffer economic punishment is coercive diplomacy. A good threat comprises a promise of punishment if the demand is not met and, importantly, non-punishment if it is conceded. If Washington proceeds to impose tariffs on Mexico, Europe and China despite their concessions, it will not be coercive diplomacy. It will be something else.

Other reasons are dogmatic. Trump has been clear that Europe, Canada, China and the rest of the world have been unfairly benefiting from the global economic system at the United States' expense. He seems convinced that tariffs will prevent this and make America great and rich again. In this view, tariffs are not coercive diplomacy, but a categorical solution to redress the unfairness that the US has been suffering at the hands of the world. He flatly rejects the argument that tariffs will in fact be paid by American firms and passed on to American consumers. He also accepts that the US economy will go through some pain, but says it'll be worth it.

Even if Washington's struggling officialdom manages to translate Trump's vision of reciprocal tariffs into implementable policy, it is unclear that he will withdraw this policy if other countries drop their import tariffs.