Some presidents spend their first few weeks in office trying to make good on their central campaign promise; Donald Trump has instead done everything he can to avoid having to follow through on his. A controversial campaign pledge to enact big, universal tariffs that would transform the global-trade system and usher in American prosperity has been whittled down to a set of hollow threats designed to extract mostly symbolic concessions from America’s neighbors. Trump is behaving like a man who has lost the appetite for aggressive tariffs—if he ever had it in the first place.
Throughout the 2024 campaign, Trump vowed to enact the most sweeping trade restrictions since the Great Depression: a 10 to 20 percent tariff on all goods coming from foreign countries, plus a special 60 percent tariff on goods from China. Trump and his key trade advisers argued that the plan would revive American manufacturing, enrich the U.S. government, and keep America’s economy ahead of China’s.
Following Trump’s victory in November, however, some of his economic advisers began offering a pared-down proposal in an effort to assuage business leaders and investors who worried about tariffs’ inflationary consequences. Tariffs, they argued, were really a negotiating tool that would allow Trump to win economic and geopolitical concessions from America’s trading partners. Howard Lutnick, who is now Trump’s secretary of commerce, claimed that the mere threat of tariffs could be used as leverage to rewrite the rules of the international trading system in America’s favor. “We’ll make a bunch of money on the tariffs, but mostly everybody else is going to negotiate with us,” he said on CNBC. Scott Bessent, now Trump’s treasury secretary, argued that tariffs could have noneconomic benefits as well; they would, he said, be “a useful tool for achieving the president’s foreign-policy objectives.”
[Rogé Karma: Reaganomics is on its last legs]
Upon taking office, Trump narrowed the logic of his proposed trade restrictions even further. The economic rationale disappeared entirely, and even the political goals tied to his tariff threats appeared oddly small-bore. In the first two weeks of his presidency, Trump threatened tariffs against Colombia for refusing to take in flights carrying deported migrants, against the European Union for running trade surpluses with the United States, and against Brazil, Russia, India, China, and South Africa (collectively referred to as “BRICS”) for considering the creation of a new reserve currency. Then, this past Friday, Trump announced his first official round of tariffs: a 10 percent levy on all goods from China and 25 percent on nearly all goods from Mexico and Canada. According to a document announcing the tariffs, their purpose would be to “hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.” “WILL THERE BE SOME PAIN?” Trump posted on Sunday on Truth Social. “YES, MAYBE (AND MAYBE NOT!).”
Then, almost as quickly as Trump had announced the tariffs, he reversed course. Yesterday morning, he decided to pause the tariffs on Mexico after its president, Claudia Sheinbaum, announced that she would deploy 10,000 troops to the border to curb immigration and drug trafficking. Later that afternoon, the tariffs on Canada were also paused following two phone calls between Trump and Canadian Prime Minister Justin Trudeau, who agreed to implement a $1.3 billion plan to reinforce America’s northern border, appoint a “Fentanyl Czar,” and launch a $200 million “intelligence directive” to crack down on organized crime and fentanyl. Trump took the opportunity to declare victory. “I am very pleased with this initial outcome,” he wrote in a post on Truth Social. “FAIRNESS FOR ALL!”
In reality, Trump’s tariff threats accomplished next to nothing beyond political theater. Canada’s $1.3 billion border plan sounds like a big concession—but it had already been announced before Trump took office. Moreover, last year, just 1.5 percent of illegal border crossings took place and just 0.2 percent of the fentanyl seized by U.S. border authorities was found at the Canadian border. Crossings at the southern border, meanwhile, have been plummeting since March and, by the end of last year, had reached a lower point than when Trump left office the first time. Fentanyl entering into the U.S. from Mexico remains a problem, but sending more Mexican troops to the border is unlikely to fix it; Mexico already sent 15,000 troops to the border in response to Trump’s tariff threats in 2019, and the scale of trafficking has only increased.
Maybe political theater was the point all along. The appeal of tariffs has as much to do with the signal they send as with their concrete benefits. In fact, a widely discussed economics paper published last year found that although Trump’s 2018–19 trade war with China failed to boost employment in areas that had been most undercut by Chinese exports, it still boosted vote share for Trump and other Republicans in those places. Trump seems to have intuited this dynamic on his own. By proposing a set of tariffs that he likely had no intention of following through on, Trump could appear tough on trade, declare a victory, and claim to have fulfilled a key campaign promise—all without having to risk political backlash over the higher prices that come with actual high tariffs. Of course, whether voters will view Trump’s actions in this way, rather than as a transparent charade, remains to be seen.
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What is clear is that the averted tariffs had essentially nothing to do with economics. For years, Trump’s intellectual supporters, notably his former trade representative Robert Lighthizer and his current senior trade adviser, Peter Navarro, have promoted a heterodox economic theory in support of major tariffs. Enacting such restrictions, they argue, would turn America into a manufacturing powerhouse, ensure its lead in the crucial technologies of the future, and deliver prosperity to Middle America. Perhaps the most striking thing about the tariffs that Trump has threatened to impose so far is that they don’t even pretend to further that vision. Trump voters were promised a manufacturing revival, and what they got was a Canadian fentanyl czar.
The partial exception is the 10 percent tariff on China that went into effect this morning and, as of this writing, remains intact. There, the economic and geopolitical case for restrictions is far more coherent: Liberalized trade relations with China has been empirically linked to the decline of America’s manufacturing base, and depending on a great-power rival for crucial technologies poses national-security risks. Yet even here, Trump has not justified the tariff in those terms—and he implemented it at a level far below the 60 percent that he promised on the campaign trail.
Trump’s second term is still in its infancy. Perhaps draconian trade restrictions remain in the offing. The available evidence, however, suggests that Trump favors steep tariffs only so long as they are theoretical. Most experts have argued that Trump’s tariff plan would inflict severe economic pain domestically. The president’s most recent moves suggest that he has come to believe them.