The Playbook Behind Trump’s Tariff Chaos

Illustration by Jina Kim

The Start of a Comeback Story

The United States is no stranger to stories of second acts and comebacks. The country has seen catastrophic losses from the Battle of Long Island of 1776 to the Great Depression to impressive comebacks like the Battle of Midway and the New England Patriots in Super Bowl 51. On November 5, 2024, President Trump staged one of the greatest comebacks in American politics. After leaving the White House in 2021 in disgrace and facing multiple criminal charges, he defied the odds to win the 2024 presidential election, winning every swing state, the popular vote, and control of Congress. The mandate given to him by the American people would set the stage for a new era of how America does business with the world. On February 1, 2025, President Trump signed an executive order to impose a 25 per cent tariff on all imports from Canada and Mexico and place a 10 per cent  on imports from the People’s Republic of China (PRC) under the pretext of the fentanyl crisis. On February 11, President Trump signed proclamations to close existing loopholes and exemptions to restore a true 25 per cent tariff on steel and elevate the tariff to 25 per cent on aluminum. The most consequential decision on foreign trade would come on April 2, when President Trump declared “America’s Liberation Day” and invoked the International Emergency Economic Powers Act (IEEPA). A 10 per cent tariff on all imported goods, and additional tariffs on countries with large surpluses with the U.S. including the PRC, the European Union, and Japan, were hit with even higher tariffs of 34 per cent, 20 per cent, and 15 per cent, starting April 9. The speed and scale of these tariffs caused confusion across global markets and impacted both ally and foe alike. The President has changed his trade policy within a Truth Social’s notice, escalating tariffs with countries and then announcing delays to negotiate trade deals. With all this disruption, one question remains: why would President Trump choose to upend the stability of the global trading system and send the markets and supply chains into chaos?   

The Foundations Of Resentment

Even before President Trump entered the world of politics, he had loathed American trade policy and the country’s trade deficit with other countries. In a 1988 interview with Oprah Winfrey, he stated “We are a debtor nation. Something is going to happen… because you can’t keep on losing two hundred billion, and yet we let Japan come in and dump everything right into our markets. It’s not free trade.” Then in 2011 when teasing a presidential bid for the 2012 election, he said that he felt the U.S. was not respected around the world and was being “ripped off” by “smart countries”. The idea that the U.S.’s trade deficit with other countries at the behest of its close allies would later become the pillars of his economic message in his presidential campaigns. When President Trump ran for the presidency in 2016, he was able to differentiate his candidacy by vowing to bring back American manufacturing jobs and levy tariffs on imports. He declared in a speech in Toledo, Ohio that “if a company wants to fire their workers, move to Mexico or other countries, and ship their products back into the United States, we will put a 35 per cent tax or tariff on those products”. This message of economic relativization would resonate with the Rust Belt states which had lost 1.5 million manufacturing jobs between 2001 and 2010, and propel President Trump to an upset victory where he won key swing states like Wisconsin, Pennsylvania, Ohio, and Michigan.  

The First Half of “Trumponomics”

In his first term, President Trump introduced a new era of American trade policy that drifted away from the more globalist approach his predecessors had taken. Just three days after taking office, he withdrew the United States from the Trans-Pacific Partnership (TPP), a major multilateral trade agreement aimed at strengthening economic ties across the Asia-Pacific. Later that year, in June 2017, he also announced the U.S. would withdraw from the 2015 Paris Agreement on Climate Change, citing concerns over its economic impact. Beyond just trade and international agreements, President Trump would use tariffs as a central tool to implement his agenda. For example, in March 2018, he levied a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum, under Section 232 of the Trade Expansion Act, citing national security concerns. The most notable action on trade President Trump took was the trade war he launched against the PRC. In a series of tariffs announced, the most expansive move came on August 1, 2019 when President Trump said the U.S. would impose a 10 per cent tariff on $300 billion worth of Chinese goods, effective September 1. Known as “List 4”, this round targeted a wide range of consumer goods, including electronics, clothing, toys, footwear, smartphones, and laptops. The confrontational approach on handling relations with the PRC would be carried on by his successor, President Biden who had kept the tariffs President Trump placed in his first term. President Biden would also place additional tariffs on China and export controls, which included a 100 percent tariff on electric vehicles, a 25 percent tariff on lithium-ion EV batteries, a 50 per cent tariff on photovoltaic solar cells and restriction on chip exports to the PRC. The policies from both presidents demonstrate a clear shift to treat the PRC as a threat to the country’s superpower status and far away from the relations the countries shared when the U.S. worked with other countries to admit the PRC into the World Trade Organization in 2001.  

Tariffs As A Tool To Bolster American National Security

While tariffs are often associated with economic policy, the Trump Administration views American economic strength as closely tied to its national security and sees tariffs as a strategic instrument to safeguard it. Across the world, the U.S. faces various geopolitical threats that seek to undermine its influence on the global order. Russia’s invasion of Ukraine in 2022 demonstrated that deterrence from America’s military hard power is not enough to maintain peace and keep its adversaries in line. As new threats arise, there is serious concern that the U.S. does not have the industrial base to support its military power and this leaves its diplomatic influence vulnerable. For instance, since Russia’s invasion of Ukraine, a core component of the military aid provided by the U.S. was 155mm artillery shells. In a 2023 interview, President Biden admitted that both the U.S. and Ukraine were low on ammunition. Before the Ukraine war, the U.S. produced just 14,400 155mm artillery shells per month, far below the 438,000-per-month surge capacity seen in the 1980s. While production is ramping up to 100,000 per month by 2025, the gap remains significant. 

Beyond just defence, what seem to be economic issues with industries like healthcare and technology also represent a key threat to American national security. For example, the COVID-19 pandemic highlighted the vulnerabilities of American offshoring. During the pandemic, it was difficult to procure vital supplies such as masks and at the timeU.S. Department of Health and Human Services figures reported that 95 per cent of surgical masks and 70 per cent of tighter-fitting respirators, such as N95 masks, were made overseas.On technology, the U.S. manufactures just 10 per cent of the global chip supply, meanwhile, 100 per cent of all advanced chips are developed overseas, with TSMC in Taiwan dominating the market. This comes against a background where the PRC is rapidly building the size of its military to prepare for an invasion of the island by 2027. While these may be smaller examples of a much larger conversation, the question remains; is the U.S. ready for another global pandemic, defend its allies militarily, or handle the economic and technological repercussions of a PRC invasion of Taiwan? While viral AI videos circulate of American workers making basic textiles and shoes, the reality is the Trump administration is not looking to be the textile capital of the world. Instead, the administration seeks to strengthen its industrial and technological manufacturing capabilities as highlighted by President Trump who told reporters“we're not looking to make sneakers and T-shirts. We want to make military equipment. We want to make big things”.While the intent behind the tariff policy on national security might seem reasonable the larger question remains implementation, and realization, and whether it is even feasible. 

Tariffs As a Way to Pay the Bill for Campaign Promises

President Trump’s victory in the 2024 presidential election can be attributed to his economic platform and the coalition of working class voters he was able to build. As part of his campaign platform, he promised to make his 2017 tax cuts permanent, with additional tax breaks like no tax on tips, social security, and overtime. In addition to his economic policies, another issue where he convinced voters was on immigration, where he promised to implement the largest deportation effort in American history. With these policies comes a steep price tag, and in his signature legislation named the “One Big Beautiful Bill” (OBBB), Congress passed key provisions of his campaign promises. The OBBB provides tax deductions of up to $25,000 USD for tips, $12,500 USD for overtime pay, and $6,000 USD in tax-exempt Social Security benefits for individuals earning below specified income thresholds. On immigration, the bill allocates $150 billion USD for enforcement, including $45 billion USD to expand ICE detention capacity to 100,000 beds, $46.5 billion USD for border wall construction, and $30 billion USD for ICE operations and deportation. At the same time, the law will see significant cuts to welfare, with a $1.02 trillion USD cut in spending on Medicaid and Children’s Health Insurance Program and $186 billion USD in cuts to food stamps through 2034. Beyond the cuts to social welfare, the OBBB will still be a burden to the country’s debt, with the Congressional Budget Office predicting the bill would increase the federal deficit by $3.4 trillion USD by 2034 all while the current national deficit stands at approximately $37 trillion dollars USD. To cover that cost, President Trump has long thought of tariffs as a way to generate revenue for the federal government. It is no secret he admires the times of the late 1800s when the U.S. government's budget was driven by tariffs, and has praised Presidents like William Mckinley who he said “made our country very rich through tariffs and through talent.” Evaluating the current progress on tariffs, Customs and Border Protection has been able to collect $106.1 billion USD with $81.5 billion USD being derived from President Trump’s tariffs. Treasury Secretary Scott Bessent and trade advisor Peter Navarro have previously estimated tariffs could generate north of $300 billion in revenue, though that is still not even close enough to bring back the days where tariffs could fund the government’s operations where the government’s current budget is $7 trillion USD.

In all, the answer to whether President Trump’s tariff policy will be a success or failure is time. Currently, economic indicators are flashing mixed signals on the impact the tariffs have had on the U.S. economy. While at first it seemed like the job market was strong with an estimated 291,000 jobs added in May and June, later revisions showed the economy only added 33,000 jobs. Inflation has held at 2.7 per cent in July and GDP has increased at an annual rate of 3.3 per cent in the second quarter of 2025. Beyond the economy, the U.S. Court of Appeals has ruled that the tariffs placed by the Trump Administration under IEEPA were illegal. The court did not immediately halt the tariffs and has allowed them to be in place until October 14 and President Trump has vowed to appeal the decision to the Supreme Court of the United States. The reality is that President Trump’s term will expire in 2029 and he is not eligible to run for re-election. His desire to onshore American manufacturing and change how the federal government generates revenue will take much more time then he will be in office. Though, the core economic and geopolitical challenges the United States will face with respect to its deficit, and adversaries will still be there regardless of who succeeds him. Ultimately, President Trump was elected by the American people to lead and govern the country, and with that brings the consequences of his policies, for better and for worse.