Will Trump's tariffs beat sanctions for 'America First?' – DW – 07/21/2025

DW

14 hours ago

Donald Trump is betting that tariffs rather than sanctions will fix economic and geopolitical imbalances. But does the threat of rising US inflation and retaliation make sanctions a safer choice?
US President Donald Trump's reliance on tariffs rather than sanctions has been described as both the "world's worst bet" and "a powerful proven source of leverage" to protect the national interests of the United States.
Since his return to the White House in January, Trump's tariff threats against dozens of countries have created great uncertainty among US businesses and global trading partners.
What's become known as "tariff tango" — bold pledges of steep duties on foreign goods, followed by abrupt reversals — suits Trump's shifting political or economic goals. Yet, financial markets remain on edge, not knowing how or when the president may deploy tariffs next.
The tariff on China, the biggest economic and military rival to the US, reached historic highs in April, soaring to 145% before being significantly cut the following month after trade talks in London.
Trump's sudden increase and later rollback of tariffs show how he uses them as a flexible way to fix what he sees as unfair trade, based on past trade disputes.
"What shapes the president's views is the rapid rise of Japan in the 1980s, and the feeling that the Japanese were out-competing the iconic American car industry because the US has been too generous in its trade terms," Jennifer Burns, associate professor of history at Stanford University, told DW.
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Tariffs are Trump's preferred weapon to tackle the massive US trade deficit, particularly with China, which amounted to $295 billion (€253 billion) in 2024, according to the US Census Bureau. They also align with his "America First" agenda to protect domestic industries and boost US job creation.
The White House has defended the president's approach, insisting that tariffs can be quickly deployed and, unlike sanctions, don't completely shut foreign markets to US firms.
"[Trump] can add this pressure when he wants and then bring it back when markets start to freak out or it stops serving his purpose," Sophia Busch, associate director of the Geoeconomic Centre at the Atlantic Council think tank, told DW. "This is much easier with tariffs than with sanctions."
Although tariffs have been widely criticized for their potential to stoke inflation, they do raise revenue for the US Treasury, unlike sanctions. US tariff revenues are up 110% to $97.3 billion in the first half of the year, compared to the same period last year. Tariffs are expected to raise $360 billion next year, according to the Urban-Brookings Tax Policy Center.
Tariffs give Trump direct, unilateral control, using executive orders without needing approval from the US Congress. Sanctions, on the other hand, often require complex legal frameworks and cooperation with international partners, like the European Union.
The preference for tariffs over sanctions reflects Trump's aim for rapid, visible economic leverage, but raises concerns about the destabilizing effects of such policies on global trade and peace.
"The reason [tariffs] have such a bad reputation is because they're linked to these episodes of de-globalization, and in the 20th century, they were linked to armed conflict," said Burns. "If low tariffs and open markets knit countries together in a way that forestalls armed conflict, does it mean that we might be moving away from that?"
Trump's second-term policies suggest he is using tariffs to achieve objectives typically associated with sanctions, such as pressuring countries like Canada, Mexico and China on nontrade issues like immigration and drug trafficking. These tariffs have prompted retaliatory measures or threats, which have intensified global trade tensions.
Similarly, Colombia was threatened with tariffs after it rejected US deportation flights, while threatened levies on the European Union were partly announced as a response to EU privacy and climate regulations.
Earlier this month, Trump threatened to impose a 50% tariff on imports from Brazil, which were framed as retaliation for the prosecution of former Brazilian President Jair Bolsonaro, a close ally. The far-right politician faces trial for allegedly plotting a coup to overturn his 2022 election loss, including plans to assassinate political rivals.
Previous US administrations have preferred sanctions over tariffs as a punitive tool to bring rogue countries into line.
Since Moscow launched its full-scale invasion of Ukraine in February 2022, the US has imposed more than 2,500 sanctions on Russia, targeting individuals, entities, shipping and aircraft. The US has also imposed sanctions on Venezuela, Iran and North Korea.
"These economies are not crucial trading partners for the US," the Atlantic Council's Busch said, adding that Trump's tariffs on the "top US trading partners" were "more of an economic threat domestically."
Trump has recently expressed more openness to deploying sanctions. Referring to a bill proposed by Senator Lindsey Graham for additional penalties on Moscow if it fails to negotiate a peace deal in good faith with Kyiv, Trump said he was "very strongly" considering fresh sanctions.
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If passed, the Sanctioning Russia Act of 2025 will target key Russian officials and oligarchs, financial institutions and the energy sector, aiming to curb Russia's ability to export oil and gas.
The bill, which has bipartisan support, also proposes secondary sanctions on third countries and foreign companies, which Trump has termed "secondary tariffs" of up to 500% on countries importing Russian energy.
Trump's similar "secondary tariffs" of 25% on buyers of Venezuelan oil, which took effect in March, were also designed to pressure energy importers to align with US foreign policy, a role typically reserved for sanctions.
Secondary sanctions usually include blacklisting individuals and entities, asset freezes and banking restrictions. The threat of US criminal charges and travel bans is also often used.
"Sanctions are more about punishing countries for violating international norms," Burns told DW. "They're in response to specific actions, and if those actions cease, the sanctions can be undone."
Noting how the uncertainty around Trump's tariff policy had left US firms and global trade partners reeling, Burns warned that "years of tariff uncertainty" may cause a "serious economic slowdown, as businesses and investors wait for a more predictable landscape."