Trump's Trifecta: Leveraging tariffs and energy dominance for industrial renewal

The Hill

a day ago

President Trump's trade and energy policies are recalibrating the global economic order — and not by accident. Under his leadership, trade is no longer simply about moving goods. It is a tool of strategic policy — one that drives industrial revival, and shapes strategic, economic and national outcomes.
Trump's approach is disruptive but methodical. Tariffs create negotiating power, leading to trade agreements that reduce deficits and rewire supply chains. When combined with U.S. energy exports and capital markets, this strategy doesn't just rebalance trade — it reinvigorates American industry.
As a senior negotiator on the U.S.-China Phase I Trade Agreement in Treasury during Trump's first term, I saw firsthand that what critics dismissed as 'erratic', 'chaotic' and 'unpredictable' was, in fact, deeply strategic. President Trump's instincts, honed by decades of high-stakes dealmaking, informed a broader strategy. He approached policy like a grandmaster playing three-dimensional chess: every tariff, handshake and message was a calculated move to reassert American economic leadership.
Just as in Trump's first term, this administration began by confronting structural imbalances. The 2024 U.S. goods trade deficit hit $1.2 trillion — its highest in history. In response, Trump used executive authority to impose reciprocal tariffs — not as an end in themselves, but as tools to bring others to the table.
Starting in early 2025, Trump's targeted tariffs compelled negotiations to rebalance trade relationships and repatriate supply chains.
Japan agreed to reduce average industrial tariffs from 25 percent to 15 percent and pledged $550 billion in U.S.-bound investment. The European Union followed suit, agreeing to a framework that includes a baseline 15 percent tariff on industrial goods, expanded market access for U.S. energy, semiconductors, and pharmaceuticals, and a commitment to $420 billion in foreign direct investment into the U.S. And, most recently, the United States also reached a trade agreement with South Korea: Seoul will face a 15 percent duty, reduced from a threatened 25 percent, in exchange for a pledge to invest $350 billion in U.S.-owned projects and purchase $100 billion in American liquefied natural gas and energy products.
Indonesia and the Philippines opened markets for U.S. agriculture and energy, while committing to major purchases, including 50 Boeing aircraft. Vietnam accepted 20 percent tariffs and tighter controls on transshipped Chinese goods. Negotiations continue with India, Taiwan and others.
Together, these countries now account for $809 billion — or 67 percent — of the 2024 U.S. trade deficit. Once deals with India and Taiwan are finalized, that coverage will exceed three-quarters. A mere 5 percent improvement across these relationships could slash the annual deficit by up to $95 billion.
Beyond deficit reduction, these agreements reset incentives. They punish transshipment, enhance transparency and support rules-of-origin provisions that favor North American manufacturing.
The result? Companies are investing in new U.S. production — auto components, semiconductors, specialty steel and energy systems. And job creation follows capital. Analysts estimate that up to 1.5 million advanced manufacturing jobs could be brought back to American soil over five years — a far cry from Barack Obama's declaration that some U.S. manufacturing jobs were gone forever.
Trade reform paves the way for yet another explosion in growth: deploying U.S. energy and capital into newly aligned partner markets.
Programs like America Crece and Asia EDGE, flagship infrastructure growth initiatives during Trump's first term, demonstrated the power of this model. This programming identified and unlocked growth opportunities in our partner countries using American energy exports and American equipment, employing American workers, and financing through American capital markets.
In Latin America alone, we identified over $300 billion in infrastructure projects with U.S. private capital in the lead. In Vietnam, we identified $8 billion in near-term energy exports and $50 billion in longer-horizon infrastructure investments. Before the Biden administration ended this programming, we executed on $2.5 billion in transactions in Panama, backed a $3.5 billion facility in Ecuador and laid the groundwork for more than $4 billion in liquefied natural gas-based investment flows into Vietnam.
Japan and Taiwan are now adopting this U.S. liquefied natural gas-driven model. Their national priorities — liquefied natural gas security and grid modernization — create natural demand for U.S. energy exports and financing partnerships. Trade deals open the market; energy and infrastructure partnerships deliver the substance.
Our capital markets are unmatched in size, efficiency and depth. Trump's tariff leverage opens doors. Energy exports and U.S. financing flow through them — fueling global infrastructure while anchoring demand for American industry.
This energy multiplier also advances a core tenet of Trump's economic agenda: U.S. energy dominance. American liquefied natural gas, coal and refined products are now strategic assets — tools of both commercial strength and geopolitical influence.
Trump's approach fuses trade, energy and finance into a cohesive doctrine. It turns deficits into investment. It transforms market access into industrial revival. And it leverages the full might of U.S. capital to strengthen allies abroad and jobs at home.
If the goal is to bring back U.S. manufacturing, secure energy markets and make capital markets work for working Americans — this is the model. The chessboard is set. And America, once again, is playing to win.
Mitchell A. Silk served as assistant secretary for International Markets at the U.S. Treasury during Trump's first term. He was the senior Treasury official on U.S.-China trade negotiations and helped design America Crece and Asia EDGE. He is the author of ' A Seat at the Table: An Inside Account of Trump's Global Economic Revolution,' to be published in September 2025.