2025/04/29

Why Did the U.S. Impose Tariffs on Allies? Understanding the Deeper Strategic Logic Behind Trump's Trade Policy

Originally published on April 12, 2025, this piece was written in the midst of consecutive declines in the Taiwanese stock market, amid mounting personal losses.

During my evening commute, I spent some time chatting with ChatGPT about the logic behind U.S. tariff policies. I was struck by the AI’s ability to reason through complex topics. Here’s a summary of our discussion:

During his presidency, Donald Trump's decision to impose tariffs around the world wasn't just about boosting the U.S. economy—it was part of a broader strategic play.

First, the Trump administration deliberately targeted not only rivals but also key allies with high tariffs. This wasn't simply a protective trade measure; it carried a clear political message. By applying economic pressure, the U.S. left other countries little room to remain neutral, especially when America was launching sanctions against specific nations. Trump understood that without clear incentives or consequences, many countries would choose to stay on the sidelines. Tariffs effectively forced allies to the negotiating table, compelling them to take a stand and pick a side.

Second, Trump's highly public approach to negotiations wasn’t just about securing better trade deals. It was a way to test and sort out true allies—those willing to side with the U.S. in future confrontations. His negotiation style was intentionally coercive: countries that hesitated or resisted faced the threat of even greater economic pressure. Through this method, Trump aimed to build a tighter, more clearly aligned network of partners, ensuring greater consistency in international positions.

Finally, the Trump administration’s relentless escalation of tariffs against China wasn’t about generating more revenue. It was about sending an unmistakable signal: the U.S. no longer wanted the deeply intertwined economic relationship it once had with China. By doing so, the administration not only tried to curb China’s economic rise but also encouraged other nations to rethink their own economic and political ties with Beijing.

In short, Trump’s use of tariffs served multiple strategic purposes at once: clarifying ally positions, strengthening alliances, and reshaping the global geopolitical landscape—particularly in setting the stage for long-term U.S.-China competition. The thinking behind these moves went far beyond economics, reflecting a larger reordering of global politics and diplomacy.

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