Published April 10, 2025
Tariff foes are hoping that bilateral negotiations and market pressure will force President Donald Trump to retract his controversial tariffs. They’re surely celebrating now that Trump has paused his large tariffs for 90 days in favor of a 10 percent uniform “reciprocal tariff,” even though he has also increased the rate imposed on China to 125 percent.
All this shows how committed Trump is to the use of tariffs as a means of changing the global trading system. The fact is that Trump holds all the cards in this game. If he’s committed to using some level of tariffs to remake the global trading system — and he seems to be — he’s going to get his way.
Economists deride Trump’s deep, decades-long belief that the balance of trade is akin to a national profit and loss statement, but Trump thinks that it’s bad for the United States to send hundreds of billions of dollars a year out of the country in exchange for cheaper or better goods. His sense of loss is compounded given which nations are receiving this money and how they treat American exports. NATO allies like Germany, Italy, and Canada, for example, run up massive trade deficits with the U.S. yet massively underspend on their own defense.
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Henry Olsen, a senior fellow at the Ethics and Public Policy Center, studies and provides commentary on American politics. His work focuses on how America’s political order is being upended by populist challenges, from the left and the right. He also studies populism’s impact in other democracies in the developed world.
