Are Trump's tariffs the new sanctions? – DW – 07/21/2025
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.
While tariffs essentially are taxes on imports primarily used to protect domestic industries, sanctions are penalties imposed on another country to punish and its government. Sanctions typically put restrictions on trade or finance.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.
To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video
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.
To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video
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."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
DW
8 minutes ago
- DW
Will EU lose out as SE Asia strikes trade deals with US? – DW – 07/28/2025
New trade deals between the US and key Southeast Asian economies are reshaping global commerce. While the EU could lose market share, it's also possible that these agreements end up bolstering Brussels' negotiating hand. Vietnam, Indonesia, and the Philippines have struck separate deals with the White House in recent weeks to significantly reduce the tariffs the US will levy on their exports, as the August 1 deadline looms. To access the market of the world's largest economy, all three Southeast Asian states have pledged to reduce their tariffs on US goods to nearly zero and increase their purchases of American products. In some cases, this may negatively affect European exports to Southeast Asia. However, most analysts believe that zero tariffs for the US could work in Europe's favor by pressuring Southeast Asian states to also lower their tariffs on European goods. On Sunday, Washington and Brussels reached their trade deal framework, with a US tariff on EU exports set at 15%, marking the end of a monthslong standoff between two of the world's largest economies. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video On July 22, US President Donald Trump announced that a 19% tariff would be applied to goods from the Philippines, up from the 17% rate set in April, while Manila agreed to eliminate levies on US exports. Philippine President Ferdinand Marcos Jr. said that his country would import more soy, wheat, pharmaceutical products, and cars from the US. Days earlier, the US and Indonesia, Southeast Asia's biggest economy, struck a deal in which the US lowers the duties on Indonesian exports to 19%, down from a threatened 32%. Jakarta also agreed to eliminate tariffs on almost all US goods and scrap all non-tariff barriers facing American firms, including recently introduced pre-shipment inspections on imported goods and local content requirements, which had prevented Indonesia-based companies from using certain imported products in their manufacturing processes. According to Trump, Jakarta will also buy $15 billion (€12.9 billion) in US energy, $4.5 billion in American agricultural products, and 50 Boeing jets. Furthermore, Indonesia will remove restrictions on exporting industrial commodities, including critical minerals, to the US. Such restrictions have been in place for years, enabling Indonesian firms to process raw minerals locally and produce higher-value-added products. Earlier in July, Vietnam secured a deal that will see the US imposing a 20% tariff on Vietnamese goods, a sharp drop from the 46% announced in April, as well as zero tariffs on products the US exports to Vietnam. "Vietnam will do something that they have never done before, give the United States of America total access to their markets for trade," Trump said on July 2 in a social media post after agreeing to the deal with Hanoi. It remains to be seen whether other Southeast Asian countries currently negotiating with the US will follow a similar approach. Thailand has stated its intention to maintain tariffs on agricultural imports, and Malaysia is reportedly pushing back on some of Washington's demands. US exports to Singapore are already tariff-free. Initially, the "reciprocal tariffs" were scheduled to take effect on July 8, but the White House delayed the deadline until August 1. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Even though the US looks set to considerably lower the tariffs on Southeast Asian exports from the initially threatened rates, settling around the 20% mark, they are likely to disrupt some regional trade links with the US, the largest export market for most Southeast Asian goods. This could be a boon for Southeast Asian exports into Europe, where import tariffs will be lower. However, it's unclear whether European exporters would benefit, too. According to a report last week by , around 12% of the EU's exports to Indonesia and Vietnam are at risk following the US's signing of bilateral agreements with both countries. In Vietnam, this could affect $1.5 billion worth of European exports. "If products bought from the US replace products purchased from the EU, that will negatively impact European exports to the region," Daniel Balazs, research fellow in the China Programme of the S. Rajaratnam School of International Studies at Singapore's Nanyang Technological University, told DW. "However, the negative impact is likely to be limited, because Southeast Asian nations' interest is to maintain diversity in their trade relationships to avoid overreliance on a single actor," he added. Alfred Gerstl, an expert on Indo-Pacific international relations at the University of Vienna, noted that in only a few sectors — particularly mechanical engineering and the chemical industry — there is direct competition between US and European companies. But he told DW that some EU companies may reconsider their plans to relocate their production base to Southeast Asia due to the now higher US tariffs on goods coming from these countries. In 2024, EU-Vietnam trade was worth €67 billion, of which €12.3 billion was in European exports to Vietnam, according to data from the European Commission. Indonesia imported €9.7 billion worth of goods last year, while the Philippines imported €7.7 billion. Overall, the EU exported approximately €94 billion worth of goods to the Association of Southeast Asian Nations (ASEAN) region in 2022. Most European exports to Vietnam already benefit from zero tariffs, thanks to the EU-Vietnam free trade deal, which came into effect in 2020, so the zero-tariff policy on US exports will have limited impact, Khac Giang Nguyen, a visiting fellow at the ISEAS–Yusof Ishak Institute in Singapore, told DW. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Competition may intensify, especially in sectors such as agriculture, where American goods may gain new ground, Nguyen added, although Brussels might also use the US tariff deals as leverage to encourage Hanoi to accelerate tariff cuts under the EU-Vietnam trade deal. Chris Humphrey, executive director of the EU-ASEAN Business Council, said that there will now be pressure on Southeast Asian states to make similar tariff offers to other trading partners, including the EU. "It will certainly strengthen the EU's position in ongoing FTA negotiations with ASEAN countries," he told DW. A deal with Thailand is expected to be finalized this year, while talks with Malaysia recommenced in January and with the Philippines in March 2024. Indonesian President Prabowo Subianto and European Commission President Ursula von der Leyen met in July to express their hope of signing the economic agreement in September, following nearly a decade of negotiations. "Indications are that in the case of Indonesia, the EU will get zero tariffs on at least 98% of tariff lines," Humphrey noted. The Southeast Asian countries with which the EU isn't negotiating trade deals — Brunei, Cambodia, Laos, and Myanmar — currently import relatively little from European markets.
Int'l Business Times
9 minutes ago
- Int'l Business Times
Ireland's 'Economic Miracle' At Risk From Tariffs
The deal between the United States and the European Union may have averted a transatlantic trade war, but worries persist in Ireland where crucial sectors are dependent on US multinationals. Attracted primarily by low corporate taxes, huge pharmaceutical firms like Pfizer, Eli Lilly, and Johnson & Johnson, and tech giants like Apple, Google, and Meta have based their European headquarters there. The US investor influx has boosted Irish tax coffers and fuelled record budget surpluses in recent years. But Trump's tariffs -- a baseline rate of 15 percent on EU exports will apply across the board -- present a stress test for the Irish economic model. Once one of western Europe's economic laggards, Ireland became known as the "Celtic Tiger" thanks to a remarkable turnaround in the 1990s. A model built on low corporate tax and an English-speaking workforce in an EU country proved seductive to foreign investors, particularly from the US. Their presence drove rampant economic growth and would later help Ireland rebound from the financial crash of 2008. The transition was an "Irish economic miracle," said Louis Brennan, professor of business studies at Trinity College Dublin. "Ireland has advanced in a matter of decades from being one of the poorest countries of northwestern Europe to being one of the most prosperous," he told AFP. Last year Ireland hiked its corporate tax rate from 12.5 to 15 percent after pressure from the Organisation for Economic Co-operation and Development (OECD), but still anticipates a budget surplus of 9.7 billion euros for 2025. Ireland's "spectacular" transformation "may have been too successful because we are very dependent in many ways on American companies," says Dan O'Brien, director of the IIEA think tank in Dublin. Spared from the first round of Trump's tariffs, pharmaceutical companies are now being targeted by the American administration, keen to repatriate production to home soil. Earlier this month the US president threatened a 200 percent levy on the sector. Irish Prime Minister Micheal Martin expressed mixed feelings at Sunday's 15 percent deal, welcoming that "punitively high tariffs" were avoided. But "higher tariffs than there have been" will make transatlantic trade "more expensive and more challenging," he added. The new 15 percent levy sealed will be "particularly unwelcome in Ireland," O'Brien told AFP. "The pharmaceutical industry is very large relative to the size of the economy, and in recent times around half of its exports have gone to the United States," he said. Pharma employs about 50,000 people and accounted for nearly half of Irish exports last year, reaching 100 billion euros, up by 30 percent year-on-year. "Ireland's problem is that it is uniquely integrated into the United States economy," said O'Brien. "There's no other European country like this. So Ireland is caught in the middle," he said. Large pharmaceutical companies, particularly American ones, also host certain patents in the country to reduce their tax burden, which then boosts the Irish tax take. Tariffs "risk strongly discouraging American companies from setting up their future factories in Ireland," said Brennan. The US could still decide to impose further tariffs on the sector following an ongoing probe into whether pharmaceutical imports pose a national security problem, he said. Tech firms with EU bases in Dublin who have also transferred part of their intellectual property rights will not be directly impacted by the imposition of tariffs on physical goods. The sector is also a "significant area of investment and employment for Ireland, but at least from a US perspective, it seems outside the scope of the tariffs," said Seamus Coffey, an economics professor at University College Cork. Beyond tariffs, tech could be affected if the United States decides to modify its tax regime to make it less attractive to set up in low-tax countries, said Andrew Kenningham, from Capital Economics. Trump shakes hands with Irish Taoiseach Micheal Martin after a lunch at the US Capitol in March to mark St Patrick's Day AFP
DW
an hour ago
- DW
Housing crisis: Germany plans 'turbo' construction boost – DW – 07/28/2025
Germany has a desperate shortage of affordable housing. The government now plans to take a "crowbar" to construction law to help get more homes built at "turbo" speed. "Building and housing is the social issue of our time," Germany's new Construction and Housing Minister Verena Hubertz told public broadcaster in May when she announced her plan to help ease the shortage of affordable housing. With the cabinet set to present its budget proposal for 2026 this Wednesday (30.7.2025), spending on housing is one of the focal points. In a country where it can take longer to get approval for a development project than it does to actually build it, Hubertz said she wanted to give local authorities a "crowbar" to get around labyrinthine urban planning laws. That crowbar labeled "Bau-Turbo" (construction turbo) is a new paragraph (§ 246e) to be inserted into the German Building Code. If the legislation is passed in the fall, municipalities will be given the opportunity to approve construction, change of use and renovation projects that deviate from the provisions of the Building Code if those projects serve the construction of new residential buildings. Planning applications will also be automatically approved after two months unless vetoed by the municipality. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Building regulations vary between each of the 16 states and among municipalities, which has resulted in an ever-growing patchwork of rules governing everything from the number of electric sockets per room to the shape and color of roofs. The Construction Ministry estimates its legislative amendment, to be passed by the Bundestag in fall, will save companies, citizens and local authorities around €2.5 billion ($2.9 bn) a year. Tim-Oliver Müller, the managing director of the Federal Association of the German Construction Industry (HDB), said he welcomed the government's plans but warned that housing construction "would not pick up again overnight." "The law alone will not result in a single new apartment, but it will make it easier for local authorities to approve them," Müller told DW. The construction industry has been hit by a "melange of crises," he said, largely as a result of Russia's full-scale invasion of Ukraine, rising energy prices, the increased cost of materials such as concrete and steel, inflation and a jump in interest rates from below 1% to between 3% and 4%. Müller is convinced that the new changes to the law would not lead to a reduction in quality — standard regulations, for example, with regard to fire safety and structural integrity,which remain in place. The new legislation is "purely a creation of possibilities, for example, with regard to building extensions or changing the designation of land from commercial to residential, something that was not previously possible," Müller explained. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Environmentalists have expressed concern about the easing of planning regulations because they fear that green spaces will be built on as new development projects are waved through with less time for local residents to object. "Only with green spaces can we buffer [heatwaves]. Because these green spaces provide active cooling," Stefan Petzold from the nature conservation association NABU told . Another person concerned about hot air is Matthias Günther, the head of the Pestel Institute, which conducts research on areas like the economy and housing for the public and private sectors. He described the new legislation as "a lot of hot air" that will "not achieve anything in the short term." "Additional paragraphs and sections will be added to the Building Code, creating more bureaucracy. Some things will require the consent of the municipality and, especially when it comes to building, they often have problems getting a majority because there's always someone who doesn't want it," Günther told DW. He says that what Germany really needs is an economic stimulus package for housing construction starting in the fall and accompanied by a loan program with interest rates fixed at 2% for the next 20 years. "The city would essentially pass on its more favorable credit conditions. It wouldn't cost that much. Everyone I talk to says that if they could get financing at 2% then they would start building again," economist Matthias Günther believes, adding that a similar scheme had already proven successful in Poland. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video The desperate lack of housing is one of the main reasons why rents have been exploding in big German cities, says Bernard Faller from the Federal Association for Housing and Urban Development (VHW). More than half of the population of Germany lives in rented accommodation — the highest share in the European Union. While Germany has some of the strongest tenant protection laws in the world, Faller said those laws serve to protect existing tenants and work against those who want or need to move — particularly young people and large families. "The problem remains the same: there are too few homes to meet demand," he told DW. The construction turbo plans are a "very exciting experiment," according to Faller. "Until we come up with something better, and I can't think of anything better, the key to easing the overheated housing market, to curbing rising rents, is for more affordable housing to be built," he said. Germany will need approximately 320,000 new homes every year until 2030, according to the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR). The previous federal government, which lost its majority in the February 2025 election, had promised to build 400,000 homes a year. But by 2024, that figure was just 251,900 — 14.4% down on the previous year. The new coalition of the center-right bloc of Christian Democrats and Christian Social Union (CDU-CSU) and center-left Social Democrats (SPD) is planning to boost the Construction Ministry's budget for 2025 to €7.4 billion in 2025 from €6.7 billion the previous year. This money will be invested in the construction of social housing – subsidized apartments for low-income families, projects for climate-friendly construction, turning commercial into residential areas and the promotion of home ownership for young you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter, Berlin Briefing.
