Trump’s Trade Policy Can’t Just Be Chaos

President Donald Trump, the self-anointed “Tariff Man,” loves to be unpredictable.

The ability to threaten trade barriers gives him a vast source of leverage against any country that incurs his disapproval without necessarily requiring any action by him at all. Just witness Mexico and Canada scrambling to avoid the 25 percent tariffs that Trump has promised as soon as this weekend.

It’s not an approach he’s likely to give up anytime soon, according to a number of people in Trump’s orbit I’ve spoken with, a reality that will no doubt keep markets — with their constant search for certainty about the future — in an uneasy state.

But there’s a practical limit to Trump’s unpredictability because he needs tariffs to do more than strong-arm other countries. He needs them to provide some hard-number cash for the treasury.

The administration is serious about using duties as a way to raise revenue as Republicans look to extend and expand tax cuts, Trump allies tell me. So they are working to develop a framework for achieving that — one that goes well beyond one-off threats.

In other words, against the backdrop of chaos used for any purpose, there will also likely be some kind of universal tariff — predictability by Trump standards.

The current policy focus is on the border, one Trump adviser told me, and tariffs have been a part of that strategy. But that’s just the start.

“The next push is going to be the big, beautiful reconciliation package,” the adviser added.

Under an executive order he signed on the day of his inauguration, the president called for a number of reviews and policy recommendations by April 1 that will help inform that more formalized tariff structure, which might also include the type of country- or product-specific investigations Trump pursued in his first term. But a White House official told me that Trump could act sooner.

“That’s the latest deadline by which [tariffs will] happen, but the intention is for action to be well before then,” the official said.

The size of any potential tariff is also still highly uncertain. Stephen Miran, Trump’s nominee for chief economist, has suggested it might be prudent to phase in tariffs over time, to gauge the impact on global markets.

Meanwhile, if Trump wants to approach this responsibly, maximizing revenue would require setting tariffs high enough to generate funds but low enough that they don’t stop imports entirely. In a vacuum, a 10 percent tariff on all of the roughly $3 trillion in goods imported by the U.S. would yield $300 billion. But that calculation doesn’t factor in that a 10 percent tax would be cost-prohibitive for some products and also that Trump presumably won’t tariff every import.

In remarks by video to the annual confab of economic elites in Davos, Switzerland, Trump suggested that countries might curry favor by investing in the U.S.

“If you don’t make your product in America, which is your prerogative, then, very simply, you will have to pay a tariff — differing amounts, but a tariff — which will direct hundreds of billions of dollars and even trillions of dollars into our Treasury to strengthen our economy and pay down debt,” he said.

Here, though, is where Trump’s unpredictability might cut two ways: What’s the benefit of making concessions in a deal with him if he might later blow it up for any reason?

How confident can other countries be about the long-term prospects of investing in the U.S., or adapting to a structured tariff framework, if all Trump policies have a to-be-determined expiration date?

Last weekend, he won a standoff with Colombia – a country with whom the U.S. has both a free trade agreement and a trade surplus — by threatening tariffs in retaliation for the country’s decision to turn around a military plane carrying deported migrants. The Latin American nation ultimately backed down. Point, Trump.

But he’s also deployed threats on Canada and Mexico, which could see increased tariffs as soon as Saturday.

Remember: Trump’s renegotiated NAFTA, known as the USMCA, was the crown jewel of his first-term trade policy. It would be striking for our North American neighbors to then become the first target of his tariff crusade.

Ontario Premier Doug Ford made a related point to my colleague Alex Burns last week, saying that Trump had once called USMCA “the greatest deal you could ever ask for.”

“What’s wrong with the deal now?” Ford asked.

The White House official argued that the 25 percent tariff threat is unrelated to USMCA and is focused instead on the grievances Trump has cited, including migration, the flow of fentanyl across the border and Canada’s defense spending. The official said the president was also looking to make USMCA “an even better deal” heading into a scheduled 2026 review of the trade deal.

It’s possible that the U.S. status as consumer of the world’s goods will render my point a moot one. Certainly, Americans for decades have used their power to make other countries submit to global trade rules that were largely designed by us.

But the bargain there was supposed to be that other countries would also somehow be better off, and Trump seems to make no such promises now.

Maybe he’ll surprise them.