Assessing Trump’s Tariff Strategy So Far
The Trump administration’s tariff program has been one of the most disruptive interventions in global trade policy in decades. Launched in early 2025, it was not intended as a short-term adjustment but as a structural reshaping of the global trading system. Now, several months into implementation, enough evidence has accumulated to allow a first assessment of how the strategy is performing against its own stated aims.
The intellectual foundation for this approach was laid by Stephen Miran, then a senior economic adviser to Donald Trump. In a paper published in late 2024, Miran argued that tariffs could be used as leverage to reorganise the global economy into three broad zones.
- Zone One: America’s closest partners such as Canada, Mexico, Europe, Japan and South Korea. These economies are deeply tied to the U.S. market and therefore expected to resist at first but ultimately concede in order to maintain access.
- Zone Two: Large emerging powers such as India and Brazil. U.S. leverage is partial here. Tariffs might encourage negotiation but these states also have the capacity to hedge by deepening ties with China or other partners.
- Zone Three: Strategic rivals, principally China and Russia. Tariffs are unlikely to change their behaviour, but serve to insulate the U.S. economy and contain rival influence.
This framework informed the “tariff shock” of 2025: a universal ten percent duty on all imports, higher reciprocal rates on countries with large surpluses, and the closure of the de minimis exemption on low-value parcels. Publicly these moves were justified as measures to restore fairness. In practice, they were intended to force choices: to pull allies closer, to pressure swing states into bargaining, and to wall off strategic rivals.
What follows is an assessment of the results to date.
Consolidating the Inner Circle
The clearest impact of this approach has been visible among America’s closest allies and treaty partners. Canada and Mexico were largely spared the most punitive tariffs due to the rules of origin under the USMCA. This ensured that integrated supply chains in North America, especially in autos and manufacturing, remained intact. The North American bloc was reaffirmed as the core of U.S. trade. Canadian Prime Minister Justin Trudeau admitted in June 2025 that Ottawa had “little choice but to preserve the integrated market that sustains millions of Canadian jobs,” capturing the pragmatic acceptance within Zone One.
Europe initially signalled defiance, with some in Brussels warning of a damaging spiral of retaliation. Yet by July, the European Commission reached a framework with Washington that prevented escalation. The deal was politically controversial inside the EU, but it allowed major exporters to preserve access to the U.S. market. German Chancellor Olaf Scholz defended the compromise by noting, “It is better to secure our industries’ access than to risk a full trade war with our most important partner.”
Japan and South Korea followed a similar path. Both governments faced the prospect of sweeping tariff hikes on autos and electronics, but ultimately struck agreements that capped U.S. tariffs at around fifteen percent. In return they pledged major new investments into the U.S. economy, running into hundreds of billions of dollars. Japanese Trade Minister Ken Saito conceded the deal was “not ideal, but necessary to protect our auto sector and to stabilise relations.” South Korean President Yoon Suk-yeol echoed this logic, telling parliament that Korea’s $350 billion investment pledge was “a strategic decision to ensure our companies continue to compete in the U.S. market.”
These outcomes illustrate the basic logic of Miran’s strategy. Where integration was already deep, tariffs forced concessions rather than prompting countries to look elsewhere.
Hedging by Emerging Powers
The story has been different with large emerging economies. India was initially assumed to be in the category of partial leverage, where tariffs would encourage bargaining without fundamentally breaking ties. Instead, New Delhi reacted to fifty percent tariffs on its exports by accelerating domestic reforms and diversifying trade links. The government rolled out what has been called “GST 2.0” to broaden tax revenues, making the economy less dependent on exports to the U.S. At the same time, India made diplomatic overtures to China and deepened links with Russia, signalling that it would not be cornered into compliance. Finance Minister Nirmala Sitharaman underscored this stance, saying “India will not be pressured into structural concessions under duress. We will diversify our trade partners and strengthen our domestic market.”
Brazil followed a comparable pattern. It too was hit with tariffs approaching fifty percent on agricultural and industrial goods. Brasília prepared WTO challenges and retaliatory measures, while also expanding economic cooperation with China, which had already become its largest trade partner. President Luiz Inácio Lula da Silva made the pivot explicit: “Brazil will not accept being treated as a subordinate market. If the U.S. closes its doors, we have open doors in China.”
Elsewhere in Asia, the tariff measures helped catalyse renewed consultations between China, Japan and South Korea on supply chain security. While Tokyo and Seoul ultimately made bilateral deals with Washington, their willingness to meet trilaterally with Beijing reflected the instinct to hedge. As Japanese Foreign Minister Yoko Kamikawa remarked, “regional coordination is essential in a period of uncertainty created by U.S. tariff policy.”
Entrenched Rivals
With China and Russia the tariffs were never expected to extract major concessions. They were applied as instruments of containment rather than negotiation. In practice, both governments used the moment to intensify regional initiatives and court countries unsettled by U.S. pressure.
China pressed ahead with alternative payment networks and expanded trade agreements in Asia and Africa. Foreign Ministry spokesperson Mao Ning declared in May 2025 that “China will never accept coercion in trade. We will expand our partnerships with Asia, Africa, and Latin America to counterbalance unilateral tariffs.” Exports to the U.S. fell sharply, but were partly offset by increased sales to ASEAN and African markets.
Russia emphasised its role as an energy supplier to middle powers seeking reliable access outside the U.S. system. Deputy Prime Minister Alexander Novak insisted, “U.S. sanctions and tariffs are irrelevant to Russia’s trade strategy. Our focus is on energy partnerships with Asia and Africa, not on Washington’s approval.” Moscow’s exports to India and Turkey rose during the same period, demonstrating this shift.
Achievements and Limitations
The administration can point to several achievements. More than half of U.S. trade is now effectively contained within a perimeter of partners who have accepted either exemptions or capped tariffs in exchange for concessions. North America, the EU, Japan and South Korea together represent the bulk of U.S. trade. The dismantling of the de minimis rule also extended tariff coverage to the fast-growing world of e-commerce, closing a loophole that had allowed Chinese platforms to flood the market with untaxed parcels.
Yet the limitations are equally evident. The compliance of allies has been grudging and politically fragile. Europe’s framework deal passed only after fierce internal debate, with one EU commissioner describing it as “a deal born of necessity, not of conviction.” Japan and South Korea committed to investment, but their leaders face domestic criticism for giving ground to U.S. pressure. Meanwhile, the swing states of India and Brazil have clearly drifted outward rather than closer, undermining the hope of pulling middle powers into the U.S. orbit.
There are also domestic vulnerabilities. Tariffs are already feeding into higher consumer prices, particularly as parcel trade is taxed for the first time. U.S. retail associations have warned that tariffs are “already inflating prices for everyday goods, from clothing to electronics.” Independent analyses suggest that this could weigh on U.S. growth. More seriously, the legal foundation of the policy has come under threat. A federal appeals court ruled that several measures exceeded presidential authority under the International Emergency Economic Powers Act. The Supreme Court will now decide the matter. A defeat in court could unravel the strategy just as it is beginning to take effect.
Conclusion
Trump’s tariff strategy has produced mixed results. It has consolidated an inner circle of allies and shown that tariffs can be used as leverage in negotiations rather than only as protectionist walls. At the same time it has failed to bring key emerging powers into line, and may have accelerated their shift toward alternative partnerships.
The result is a U.S.-dominated bloc that is significant in size but smaller and more fragile than its architects intended. The words of India’s finance minister and Brazil’s president capture the underlying challenge: key swing states are not accepting alignment under pressure. The durability of this new tariff order will depend on whether Washington can maintain the uneasy loyalty of its allies, withstand legal challenges at home, and manage the economic costs that are beginning to bite domestically.
