Trump's shock and awe strategy

Trump is initially using tariffs as leverage on immigration, ...

For Donald Trump, there are a number of reasons for imposing tariffs. Firstly, they are intended to combat “unfair trade practices” (also known as trade deficits). Secondly, they are used to generate revenue, for example to finance tax cuts. And thirdly, tariffs are a tool in practically all other disputes to force the other side to make concessions.

In the first days of his presidency, the third motive was the main focus. Trump threatened to impose tariffs to combat illegal immigration to the US. After all, border security is the number one issue for many of his voters. Several countries were targeted:

• Last weekend, the Colombian government initially refused to allow deportation flights from the US to land. Trump responded by threatening an immediate tariff of 25%, which would increase to 50% in a week. Since the US is Colombia's most important export market, the Colombian government, according to the White House, responded by caving in, causing Donald Trump to refrain from implementing the threatened punitive measures.
• According to press reports, there are growing signs that Trump could take action against Canada and Mexico this weekend. Shortly after his inauguration, Trump had suggested a 25% tariff on imports from Mexico and Canada, with a possible date of February 1. He justified this by saying that these countries were not doing enough to combat the flow of migrants and drugs such as fentanyl into the US. The threatened additional 10% customs duty on imports from China was justified by the fact that China supplies chemicals that are used to produce fentanyl to Mexico.

...but soon also as a remedy for the trade deficit

While these threatened measures were pursuing non-economic goals, the fight against the high trade deficit is likely to come to the fore soon. The fact that Trump has held back so far may also be due to the fact that some of the legal bases for imposing tariffs require prior investigations. Accordingly, Trump has instructed the relevant authorities to submit reports by April 1 on unfair trade practices by other countries, currency manipulation, discriminatory foreign taxes and technology transfer practices. They are also to propose measures to reduce the considerable US trade deficit. Based on the analyses available in April, Trump will then have a wide range of options for targeting individual countries, industries or entire groups of countries.

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