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news analysis
Many presidents use tariffs to force negotiations. But for President Trump, they are the point, a source of revenue as he pursues a Gilded Age vision.
David E. Sanger has covered five presidents, and recently wrote a book on the re-emergence of superpower conflict. He reported from Palm Beach, Fla.
Feb. 1, 2025, 6:38 p.m. ET
Tariffs in the United States date back to 1789, when Alexander Hamilton saw them as a solution to two crises facing the newborn republic: A desperate need to raise revenue and a desire to industrialize a nation that seemed dangerously dependent on England.
But in modern times, they have almost always been a negotiating tool — economic coercion in the service of diplomacy, a cudgel to force other nations to the table. What makes President Trump’s move on Saturday against Mexico, Canada and China different is that he seems uninterested in pursuing deals.
For now, at least, the tariffs, in his view, are the point, a means of bolstering the nation’s finances as he simultaneously seeks territorial expansion and strategic advantage over an increasingly assertive China.
He said as much in his Inaugural Address, only 12 frenetic days earlier. “Instead of taxing our citizens to enrich other countries,” he said, “we will tariff and tax foreign countries to enrich our citizens.”
He went on to describe his plan to establish an “External Revenue Service,” and a few days ago mused to reporters that income taxes might whither away, as tariffs become the main sustenance for America’s $6.8 trillion annual federal budget.
Mainstream economists are largely skeptical of Mr. Trump’s faith in tariffs as a game-changing tool for raising revenue or as an effective way of nurturing the return of domestic industries that have withered under global competition.
