Melissa Lawford
Trump certainly is using tariffs as a negotiating tactic to bring world leaders to their knees. But optimists are overlooking a second truth: the US president is also desperate for cash.
America’s public finances are shot. The deficit is the highest since at least 1975 outside of a crisis period. Debt is on track to grow at double the rate of the economy in the decades ahead.
And against this backdrop, Trump has promised tax cuts that would cost in the region of $10 trillion (£7.9 trillion) over the next 10 years.
Experts warn that for Trump, tariffs are not only a means of geopolitical leverage but a key source of funds for his tax-cutting agenda. This means they will be here for the long run.
“He views them as a revenue-raiser and his team will use them to justify tax cuts,” says Michael Martins, founder of Overton Advisory and former US embassy political specialist.
“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens,” Trump said in his inauguration speech.
“It will be massive amounts of money pouring into our Treasury, coming from foreign sources.”
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