With the power of a U.S. market that will lead the world’s economic growth, Trump uses tariffs as a bigger tool this time around, experts say.
With President Donald Trump’s return to the White House, tariffs have become a negotiation tool again, especially with China.
So far, instead of primarily using tariffs to address trade imbalances, as he did in his first term, Trump is applying the tool more broadly and more measuredly.
On his first day in office on Jan. 20, Trump signed a memo ordering federal agencies to investigate unfair trade practices by foreign countries and recommend associated trade policies.
The trade policy memo singles out China for a review of its compliance with the 2020 “phase one” trade deal, circumvention of tariffs through third countries, and fentanyl flows into the United States.
Trump also directed an assessment of the impact of China’s forced technology transfer on U.S. industrial supply chains and a reevaluation of China’s preferred trade status with the United States, also known as Permanent Normal Trade Relations.
The following day, the president threatened to impose a 10 percent universal tariff on Chinese goods as soon as Feb. 1. Since taking office, Trump has not mentioned the 60 percent rate he proposed on the campaign trail.
William Lee, chief economist at the Milken Institute, a California-based economic think tank, said Trump is using tariffs differently in his second term as “a policy tool for not just economic policy, but also for foreign policy and national security.”
Tariffs are now “a bigger instrument with a bigger set of targets,” Lee told The Epoch Times.
The recent diplomatic spat between the United States and Colombia over deportation flights marked the latest tariff success. After Trump threatened a 25 percent tariff on all Colombian goods, the South American country backed down from its previous refusal to accept deported Colombians who are illegal immigrants in the United States.
Trump also separately floated a 25 percent tariff on imports from Mexico and Canada. Lee said this would close the backdoor to Chinese goods flooding the United States through these two countries.
When Trump left office, China had benefited from decades of uninterrupted economic growth. It promoted its draconian lockdown during the COVID-19 pandemic as evidence of an authoritarian system and showcased its strength in the global supply chain, from masks to chips.
By Terri Wu
