Watching all the hype over recent weeks, I don’t think a lot of people actually understand tariffs properly in the context of the Trump presidency in early 2025. There are four groups of people that I see posting frequently. Those who honestly don’t understand the strategy. You’re the ones this article is primarily for. Those who understand, but disagree and maybe this article might help you think about the issue a bit differently. The other two? If you have predetermined biases that Trump is an idiot, then you’re irrelevant as far as I’m concerned. Similarly, if you think Trump can do no wrong, then you fall into the category of useful idiot, but at least you’re on the right side of the argument.
This short version? These are not the pissing contests that the media typically portrays them to be. Just be certain that brushing this off as a Trump “trade war” is about a far off is it can get.
There are four things that need to be remembered before making any decisions on tariffs as outside observers that we are. Much of this is based on the DIME model for the exercise of national powers. The letters stand for Diplomacy, Information, Military, Economic and reflect the ways in which a sovereign nation can project power in the pursuits of its national interests. So with that, let’s consider those four points.
- Tariffs are one of the aspects of the Economic element of the DIME model. It’s an exercise of national power that takes place along side diplomacy, information, and military. Trump seems to be the first President since Reagan to really understand the model and how to apply it. This last is simply my opinion.
- Tariffs don’t occur in a vacuum. They are not typically done arbitrarily
- We are not privy to everything that is happening in the background. Not even close. All sides are engaging in the Information aspect of DIME. Obviously.
- The objectives for each nation in Trump’s tariff actions are very different. I’ll go ahead and add Europe to that mix, as well. Even though the media isn’t talking about the European tariff situation, if you are exporting to the EU, this is very much a concern.
The tariffs with Mexico, I believe, will be the easiest to resolve. In this case, Trump is looking for political objectives more than anything. Defeating the cartels, combating fentanyl, and weakening China are all in that calculus. He also wants to keep the Mexican president alive. I think in this case, we may very well see the Military of DIME in play with the Information side of the public discussion used to whatever end suits either side the best. Regardless of the public perspective, though, you can bet that whatever action occurs will have been coordinated behind closed doors.
China represents the greatest threat to the US in the international community. China has the objective of being the dominant political-economic power in the world. The US opposes that objective. Chinese tariffs on US imports are significant. You could argue that part of it is reciprocity, but Trump’s objective is more. It is to impede China’s goal of dominance. However, remember that much of China’s economic strength is either on paper or closely tied to their Special Economic Zones. At heart, China and American political and economic philosophies are incompatible and their attempt to bandage their own is extremely fragile. They are probably the most vulnerable to tariff actions and are at the most risk of things escalating into Clausewitz classic, “War is politics by other means.” I can see China deciding they feel forced to take action against Taiwan and if desperate enough, even South Korea because of the perceived economic need.
Canada is the most difficult to assess of the original three in the question. They are a vector for China’s drug flow problem, though not as significant as Mexico. There are also problems where the porous border is concerned. But Canada also has some pretty significant tariffs in place on US goods already, so there is very much a component of leveling the playing field. I do think this will get worked out diplomatically, but I also have concerns where national pride on both sides will have an impact.
Now about the EU. This is where I have no sympathy for the opposing side. If you’re old enough to remember the formation of the EU, two primary objectives of the confederation were to be a political and an economic counter to US dominance. Notice how DIME keeps creeping in? I’ve been dealing with business in the EU since the 1990s and have reach a couple conclusions. There are a lot of tariffs whose primary objectives are protection/promotion of EU businesses over the US. Understandable, to be honest. But what concerns me is the second objective, that of using tariffs from the US as a revenue stream to subsidize EU social structure. In this case, reciprocal tariffs seem entirely appropriate to me, strictly from a balancing act. Other tariffs, should be considered on their own merits. However, this all needs to be weighed against the risk of destabilizing significant parts of European society. It will be potentially more devastating the more a country has embraced socialism. This one is going to be long and messy.
I’ve seen some thoughtful posts that have pointed out that Reagan, who was probably the most effective user of the DIME model along with Trump and John Kennedy, opposed their use. Remember, though that was in the 1980s. There wasn’t a European Union during his presidency. Circumstances then and now are very different.
So… my purely personal opinion? In conjunction with the other aspects of DIME, the use of tariffs appears appropriate. However, the saying, “No battle plan survives contact with the enemy,” very much applies here. How quickly and effectively Trump can pivot amongst the various DIME powers if needed is going to be crucial. We’ve seen that with the Mexico/Canada situation, so I’m optimistic. I see the biggest threat to his approach to be the domestic opposition. We have three groups. Those who hate Trump blindly. Those who oppose him for their own political/power success. Those who simply think he is wrong in the approach. However, that last group is not going to be actively trying to undermine his success. The first two may need to be considered as enemies domestic, I’m afraid.
Hopefully, this sheds a bit of light on how tariffs are being used. Will it succeed? I do think so, but only time will tell.