Since Donald Trump initially imposed the so-called "Liberation Day" tariffs a uniform 10% across the board tariff the world reaction has been rapid. More than 75 nations have subsequently sat down for new trade talks. Individualized tariffs are suspended pending talks (with the exception of China, who retaliated within a matter of days). Liberation Day involved the closing of loopholes on current 25% steel and aluminum tariffs as well. The strategy Trump is pursuing is worth taking a closer as this sounds utterly disastrous. The initial impression is that these tariffs, and the market reaction they caused, are short sighted, even self-destructive. The U.S. economy suffered. Conservatives lacked preparation, and the political optics weren't good. But there is a deeper strategy here that is not receiving sufficient notice. Trump has consistently emphasized shrinking the national deficit a goal that is, quite frankly, virtually impossible to accomplish except by eviscerating essential spending programs. The four pillars of federal outlays: Social Security, Medicare, Defense, Interest on Debt. Reducing Social Security or Medicare is political suicide. Even Donald Trump himself said he would never touch such programs, and any Republican who does might as well give up the next general election. The defense budget theoretically is up for grabs, but there is not much that can be cut without endangering national security. Leaving the most underreported aspect, paying the interest on the debt. Interest is the money we owe on our deficit the trillions we borrow from Treasury bonds. What goes up with higher-interest rates? Our deficit. One of the ways to reduce interest rates? Increase demand for U.S. bonds by being a stable, reliable economy. or by panicking the rest of the world into buying our debt as a haven. Lo and behold, it’s something that could be expected of Trump generating just enough disruption to send bond demand higher, refinance short-term debt (~$18 trillion soon coming due), and lock in lower costs. And for a short time, it worked. Rates went down. But markets swung back, and interest rates are back up higher than before. Such economic manipulation of your own currency and markets to adjust for interest is something you’d associate with a failing regime, not the world’s biggest economy. It’s a risky, low return play. And, perhaps, it is Trump’s method of addressing an impossible issue without getting his hands dirty on the politically off-limits. A key reality is that tariffs are sticky. They are once they’re imposed, difficult to repeal because they invoke counter-tariffs, new trade regimes, and realignments of industries. Biden was faulted for leaving the Trump-era tariffs intact but reversing them with no strategic plan for departure would be a disaster just consider the enduring effects of the 1960s chicken war, which transformed the American auto market. Even though President Trump's tariffs might not bring back American production, nor reduce the deficit, their continued presence over the long term is likely, consciously or otherwise, to alter the economy in lasting patterns. Trump’s 2016 steel tariffs produced short-term gains for production domestically. By 2025, U.S. production looked good, but that’s deceptive. Downstream manufacturers took the brunt of higher inputs, with a resultant net loss of 75,000 jobs. It’s impossible to pinpoint the direct cause between tariffs, the pandemic, and automation, but it’s fair to say the bigger impact for the American employee was negative. This is where Trump's reasoning is flawed. America, he says, should produce precursor inputs like steel, aluminum, etc., but the truth is, taxing such inputs as sheet steel makes it more difficult to produce final products domestically. Automobile manufacturers, for instance, have two undesirable options absorb the cost and pass it on through higher prices, or outsource their production overseas so that they don't have to deal with tariffs. There is no incentive for one to build in America unless the entire supply chain is economically sustainable. Is There a Smart Way to Use Tariffs? Yes, there exists a middle ground. These need to be targeted strategically, such as rare earths, critical technologies, etc. The target of the Biden administration's levies on Chinese semiconductors is the security of the U.S. as well as increasing production domestically for chips a demonstration of how targeted levies can aid critical supply chains as well as minimize dependency on geopolitical adversaries. A good fucking idea that he deserves more credit for I might add. Investors can balance dumping or support new industries, provided they are accompanied by domestic investment. But blanket tariffs on raw materials? It is economic suicide. High risks, and huge fucking balls. Trump’s trade policies are chaotic, occasionally self-destructive, and riddled with unintended consequences. But not entirely arbitrary. They are a bold possibly desperate bid to redefine world trade, impose economic bargaining, and break America’s structural deficit without crossing the third rails of politics. It is reckless. It is expensive. And it could be the only type of economic plan such a politician as Trump could manage. Figuratively destroy the country and rebuild it his way. No matter how it turns out, we'll be experiencing the effects of these tariffs for many decades.