Introduction to Tariffs and Sanctions
The trust of US President Donald Trump in tariffs and not in sanctions was described both as a "worst bet" and "a strong proven source of leverage" in order to protect the national interests of the United States. While tariffs are essentially tax on imports to protect domestic industries, sanctions that are imposed on other countries are to punish or influence their governments. Sanctions usually set up restrictions on trade or finances.
The Tariff Tango
Since his return to the White House in January, Trump’s tariff threats to dozens of countries in US companies and global trading partners have created great uncertainty. What has become known as the "tariff tango" – courageous promise steep duties for foreign goods, followed by abrupt reversals – fits Trump’s changing political or economic goals. However, the financial markets remain nervous without knowing how or when the president can use the next tariffs.
Tariffs as a Flexible Tool
The tariff for China, the largest economic and military rivals in the United States, reached historical heights in April and rose to 145% before it was significantly reduced the following month after trading talks in London. Trump’s sudden increase and later rollback from tariffs show how he uses them as a flexible way to fix what he sees as an unfair trade, based on previous trade disputes.
What influences the President’s views is Japan’s rapid rise in the 1980s, and the feeling that the Japanese exceeded the legendary American automotive industry because the United States was too generous in its trade conditions.
Trump’s America First Vision
The tariffs are Trump’s preferred weapon to be the massive US trade deficit, especially at China, according to the US Census Bureau in 2024 at 295 billion US dollars. They also agree with his "America First" agenda to protect the domestic industry and to promote the creation of jobs in the USA. The White House defended the President’s approach and insisted that tariffs can be used quickly and, in contrast to sanctions, the foreign markets do not completely close to US companies.
Flexibility and Income
Trump can exert this pressure if he wants and then bring back when the markets freak out or no longer fulfill it to fulfill its purpose. Although the tariffs were widely criticized for inflation because of their potential, in contrast to sanctions, they increase income for the US Ministry of Finance. The income from the US tariff rose by 110% to 97.3 billion US dollars in the first half of the year compared to the same period of the previous year.
Tariffs vs Sanctions
Customs give Trump direct, one-sided control using executive regulations without fulfilling the approval of the US congress. Sanctions, on the other hand, often require complex legal framework conditions and cooperation with international partners such as the European Union. The preference for tariffs compared to sanctions reflects Trump’s goal for a fast, visible economic lever, but raises concerns about the destabilizing effects of such guidelines on global trade and peace.
Blurred Lines
Sanctions are more about punishing countries for violating international norms. They react to certain actions, and if these actions set, the sanctions can be reversed. Trump’s second-term guidelines indicate that he uses tariffs to achieve goals that are typically connected to sanctions, such as under pressure countries such as Canada, Mexico and China in non-trade issues such as immigration and drug trafficking.
Economic Uncertainty
The uncertainty in relation to Trump’s tariff policy had left US companies and global trading partners uncertain. This could lead to a serious economic slowdown, since companies and investors are waiting for a predictable landscape. Earlier US administrations have preferred sanctions to tariffs as a penalty instrument to reconcile rogue countries.
Russian Energy Buyers
Since Moscow launched his complete invasion of Ukraine in Ukraine in February 2022, the United States has imposed more than 2,500 sanctions against Russia and has sought individuals, shipping and aircraft. The United States has also imposed sanctions against Venezuela, Iran and North Korea. The legislative template, which is supported, also proposes secondary sanctions on third countries and foreign companies, which Trump describes as "secondary tariffs" of up to 500% in countries that import Russian energy.
