“This is an aggressive exercise of US economic power in a way we have not seen in a very long time – at least not in the post-World War II era,” said John Creamer, who was a senior diplomat for more than 35 years and a deputy assistant secretary of state.
During his first term, Trump also imposed or threatened to impose tariffs on many US trading partners, including allies such as France and Canada, as he sought leverage in freewheeling negotiations. He also imposed punishing sanctions on such countries as Venezuela and Iran. Campaigning last year, Trump promised “universal tariffs” far beyond what he’d enacted during his first term, falsely declaring they were paid by foreign nations rather than US consumers, and vowed to revive tough sanctions on Iran and other countries.
Still, the extent to which Trump has already turned to these tools of economic coercion has proved striking.
Last Monday, he threatened that 25% tariffs on Mexico and Canada would kick in February 1 – this weekend – unless those countries act to curb migration and the fentanyl trade. On Tuesday, Trump floated 10% tariffs on all imports from China. On Wednesday, he said he would impose “high levels of taxes, tariffs and sanctions” against Russia unless it ended the war in Ukraine – a threat he reiterated on Fox News on Thursday.
On Friday, the Financial Times reported Trump the previous week had threatened tariffs on Danish officials unless they were willing to cede control of Greenland. And on Sunday, Trump said he would impose tariffs and sanctions against Colombia unless it bent to his demands and accepted military flights returning undocumented migrants. That conflict appeared to abate on Sunday night after Colombia agreed to his terms.
Meanwhile, Trump also issued an executive order renewing sanctions against the International Criminal Court in The Hague, after former US president Joe Biden had rescinded measures Trump imposed in his first term. Marco Rubio, Trump’s secretary of state, told Congress he would ensure major sanctions are reimposed on the Iranian regime. Trump also floated tariffs of 100% on the “Brics” nations (Brazil, Russia, India, China and South Africa) if they pursue alternatives to the US dollar.
“The Trump administration is really eager to demonstrate the power of sanctions and tariffs as a lever to get policy outcomes, and looking for policy opportunities to deploy it,” said Ricardo Zuniga, who served as a deputy assistant secretary in the State Department’s Bureau of Western Hemisphere Affairs during the Biden administration. “There should not be any doubt: These are not a bluff; they are very, very eager to use them as a kind of proof of concept. It’s a chance for them to test these weapons.”
Advisers said these demands reflect a cohesive approach to the tools of economic coercion. Trump and his aides think tariffs and sanctions have too frequently been used as half-measures but they could force policy changes if the United States threatens to impose them with maximum force, according to two people familiar with the matter, who spoke on the condition of anonymity to describe private conversations. The people said they think threatening maximum sanctions – but not necessarily imposing them – will also allow the US dollar to maintain its status as the world’s reserve currency, which Trump and Scott Bessent, his nominee for treasury secretary, have described as a top priority.
“It doesn’t take a brain surgeon to see that Trump is redefining US foreign policy. Previously, US presidents used commercial tools when dealing with commercial issues. But being a supreme negotiator, I’m sure Trump asked: ‘Why aren’t we using all our tools to make sure we get our way?’” said Juan Cruz, who was a senior aide on the White House National Security Council during Trump’s first term. “We’re seeing a willingness to use full-force economic tools to get what we want done, and that’s emblematic of what we’re going to see from now on.”
Trump advisers such as billionaire Elon Musk cheered news Colombia had backed down as evidence Trump could bully his way into securing policy victories.
“These countries cannot respond. The asymmetry of market pain, the flight of their capital to the United States – these emerging markets would just get crushed,” said John Feeley, who served as US ambassador to Panama from 2015 to 2019. Feeley quoted the Athenian historian Thucydides: “The strong do what they can, and the weak suffer what they must.”
And yet this sort of pressure could still ultimately backfire in ways that expose contradictions in Trump’s policy goals.
Canada, Mexico and China are the nation’s three biggest trading partners. Those three export more than US$2 trillion ($3.5t) to the United States alone each year, about two-thirds of everything Americans import. Economists have warned the imposition of tariffs will raise prices for consumers here – undermining Trump’s promise to control inflation.
Trump’s use of sanctions also has risks. Senior Treasury officials have been concerned for at least a decade that the overuse of economic sanctions could make the weapon less effective, by encouraging other nations to set up financial networks beyond US detection. Sanctions and tariff threats against US allies will give many countries added incentive to deepen their economic ties with adversaries such as China, leaving them less exposed to Trump’s financial retribution.
“It will accelerate efforts to build workarounds to US sanctions and tariffs. You’re showing that everyone is vulnerable – not just adversaries like China and Russia, but allies like Canada, Mexico and Colombia,” said Edward Fishman, a sanctions expert who served in the Obama administration. “It will undercut the potency of US economic weapons and undercut our efforts to get other countries on our side against China.”
Trump has largely threatened new tariffs and sanctions he hasn’t imposed. But foreign policy experts point out the threat must be executed at some point to be viewed by other nations as credible. The more countries Trump promises to punish economically, the greater likelihood of an escalation that hurts both countries.
“It’s a straightforward message. Whether the tactic will work or not, we’ll see,” said Caleb McCarry, who was a senior staffer to the Senate Foreign Relations Committee and was the State Department’s lead on Cuba policy during the George W. Bush administration. “Once you actually pull the trigger, you have to live with the consequences.”
– Washington Post
