Donald Trump’s expansive campaign to reset America’s terms of trade with the world already has shaken the world, yet somehow only now still appears to be hitting its stride. His campaign has shocked many for its severity, while he and his administration’s officials continue to keep the world guessing about what may be next with a parade of contradictory statements and ever-changing conditions.
As a former senior US trade official during the first Trump administration (as well as for three other US administrations), I well understand the difficulty others have in trying to decode and make sense of the developments over the past several weeks. Little has surprised me, however, for I am intimately familiar with both the worldview and the policy goals underlying these decisions from my prior work at the Office of the US Trade Representative.
For starters, I know that fostering some degree of future uncertainty was often intentional and by design during the first Trump administration. This aims to force businesses to give up trying to adjust to ever-changing tariffs and other terms and decide instead to produce in America to maintain a stable business in the US market. At the same time, what appears to be chaotic decision-making over tariffs also, at times, can simply reflect how the Trump White House functions on any particular day.
If that is unsettling to businesses, markets, and foreign trading partners, for those trying to discern whether Trump’s tariff threats are real or just a tactic to force negotiations and concessions, these guesses, too, raise even further confusion and challenges.
Late last year and early this year, for example, countless experts wishfully dismissed Trump’s pronouncements that he would pursue an aggressive tariff agenda as the work of a master tactician aiming to force America’s trading partners to negotiate. Only now have businesses and markets come to understand that something else is also in his plan. That other underlying goal is to force a permanent shift in the terms of US trade by introducing and leaving in place much higher US tariff levels on imports than at any other point since the early 1930s.
What initially seemed as confusing and perhaps contradictory tariff pronouncements have emerged in policy as two distinct, parallel goals. Trump’s recent decision to assess a flat 10% tariff rate on imports from countries with which the US has balanced trade—and even on those countries with which the US runs a trade surplus—reflects an underlying long-term goal: setting a much higher average US tariff rate on imports from the world into the future, regardless of country or other terms of trade.
Trump’s high “reciprocal” tariffs to be applied to countries such as India, Japan, and European nations, in turn, aim to force countries with a surplus in their goods trade with America to make a difficult choice: negotiate concessions to attempt to reduce those rates; do nothing and accept the new tariffs; or risk facing even higher rates by daring to retaliate against US exports in kind.
For countries willing to take that gamble and negotiate, however, there is little evidence that the Trump administration would agree to reduce any tariffs below 10%, which appears to be the new blanket “floor” tariff rate for imports that the president promised on the campaign trail.
It is fair to conclude that Trump is attempting to have his cake and eat it too with these two approaches, because that’s exactly the goal.
If that were not enough, Trump’s has justified additional “sectoral” tariffs on goods from steel to autos (and, likely soon, on pharmaceuticals and semiconductors) as necessary to restore production of specific products in the United States. In most cases, these products are also major contributors to America’s overall trade deficit with the world. In addition, these actions also appear targeted against countries that have enjoyed high, long-term trade surpluses in these products, such as against Ireland and India for pharmaceuticals, against Europe/Japan/Korea/Mexico/Canada for autos, and so on.
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Finally, it is safe to presume that China will continue to be hit with the highest average tariffs—rates that aim to effectively decouple the United States from further dependence on Chinese imports for most goods. I also expect Washington to lean on many trading partners to introduce their own policies to decouple from China, or at least provide assurances and proof that Chinese firms and Chinese exports are not finding their way into America’s market at lower rates than the US charges on direct imports from China. Above and beyond accepting high new US tariffs on their exports, expectations that US trading partners will change the terms of their own trade with China will weigh even further on any attempts to maintain goodwill with traditional US allies and partners.
If Trump 2.0 trade policy feels different than Trump 1.0, it’s not because of a fundamental shift in objectives. All these goals and instincts are familiar to me, because they were either pursued in part or various options to do so were at least considered during Trump’s first term.
Rather, the Trump administration this time is determined to carry out a fundamentally different approach, one that pushes much harder and faster to accomplish the president’s goals. This administration already has cut the few remaining strings that tied America to its 80 year-long commitment to foster and support the global rules-based trading system, and it is prepared to continue to pursue its agenda with much less regard for similar and other inevitable collateral damage that will be left in its wake.
Can we expect a major course correction? It is too early to say, but one thing is certain: howling and objections from US trading partners are unlikely to have much impact on its course, at least in the short term. Instead, the administration’s current trajectory on trade, including whether it will continue as-is or need to be substantially moderated, will instead depend on whether enough Americans continue to support it, enough US business owners are able to adjust to it, and key US markets are able to express sufficient confidence in it. Thus far, not enough guardrails to force a sharp change in course have yet to appear.
Michael L. Beeman served as a senior US trade official for over 16 years, most recently as the Assistant US Trade Representative for Japan, Korea, and APEC from 2017-2023. He is the author of “Walking Out: America’s New Trade Policy in the Asia-Pacific and Beyond” (Stanford University Press, 2024) and was a visiting scholar and lecturer at Stanford University from 2023-2024.