Trump's Tariff Strategy Evolves With Broader Executive Powers

Wilbur Ross, the former Commerce Secretary and a key architect of Trump’s first-term trade policy, has described Trump’s current tariff strategy as a deliberate evolution. This strategy involves moving faster, hitting harder, and using broader executive powers to impose tariffs for both economic and diplomatic leverage. Ross suggests that there is an underlying logic to Trump’s approach, which has sparked debate over the ultimate goals of the administration’s economic strategy.

Since taking office, President Trump has implemented a range of policies with varying levels of economic sanctions on different trade partners. Many of these announcements have not come through official White House channels. For instance, Trump threatened a 50% tariff on the EU in April by posting on his social media site, Truth Social, in an effort to bring European negotiators to the table. This approach has drawn criticism from Beijing, which claims that America’s tariff tactics amount to “coercion and blackmail” rather than constructive dialogue.

Ross, however, sees a clear tactic behind Trump’s actions. He notes that while the initial reaction to the tariffs was shock and amazement, the retaliatory measures from other countries were relatively modest. Ross believes that other nations recognize the potential consequences of a tit-for-tat trade war with the U.S. and are therefore cautious in their responses. He points out that the 10% tariff on all imported goods, which was one of the earliest measures implemented by Trump, is no longer a point of contention. This tariff, Ross argues, is a significant achievement that has been overshadowed by more extreme measures, making it seem less burdensome.

Ross also highlights that the 10% tariff on imported goods, which stood at $3.36 trillion in 2024, adds a substantial amount to federal budgets. This figure does not include tax, duties, and levies, which are worth $82 billion, nor does it account for imported services. Nations like China, Canada, and Mexico are already subject to tariffs higher than the baseline 10% universal tariff. Ross believes that Trump’s tactics reflect a more adventurous path, with a broader scope and more extreme measures compared to his first term. These tactics include threatening a 25% hike on Apple’s iPhones and raising sanctions to more than 150% on China at certain points.

Ross, who was a key ally in renegotiating America’s position on the North American Free Trade Agreement (NAFTA), felt that threatening to withdraw from the agreement and keeping an exit as a last resort was a better tactic. This approach was eventually agreed upon by Trump. Ross also oversaw the tariff actions in the first Trump administration, which included sanctions on Chinese goods as well as aluminum and steel more widely. He notes that Trump’s objectives include shrinking trade deficits, producing revenue to offset his “One Big, Beautiful Bill,” and achieving other diplomatic purposes such as addressing the flow of fentanyl into the U.S. and global defense spending.

Ross explains that Trump’s agenda is more complex and fulsome than before, with a different approach to setting the groundwork for tariffs. This time, the administration has relied more on executive powers and the Emergency Powers Act, which has led to a snag at the Court for International Trade. However, Ross believes that this snag will not derail trade talks, as businesses are operating under the assumption that Trump will eventually get what he is looking for. He adds that while the legal approval of tariffs may shift investment timelines, foreign governments also know that there are other ways Trump could punish them besides tariffs. Therefore, Ross sees this as a bump in the road rather than a significant obstacle.