Donald Trump has imposed more tariffs than any American president in at least a century – but only a fraction of the ones he’s threatened.
The withdrawal this week of a proposed charge on European nations over Greenland is the latest example of how Trump sometimes wields the tariff weapon without firing it. And the number of unrealised threats is mounting.
So far the president hasn’t delivered the sweeping duties he promised on nations like Mexico and Canada, or products including semiconductors and foreign movies. So-called “secondary tariffs” for countries that trade with US adversaries – most recently Iran – have yet to materialize either.
Trump says his readiness to use tariffs has helped the US win trade concessions and access to critical minerals, and settle conflicts around the globe. It’s a negotiating strategy where even the threat can create leverage. But there are signs that counterparties are growing familiar with his maneuvers — potentially making them less effective.
“There’s obviously a credibility issue the administration has with anyone it’s negotiating with,” said Tim Meyer, a professor at Duke University School of Law, who specializes in international trade. “Other countries have read the playbook now. You let him announce a deal and you hope it goes away.”
Some of Trump’s retreats came after his targets threatened reprisal – notably China. The president hiked tariff rates well into triple digits, but brought them most of the way back down after Beijing said it would block exports of crucial rare earths.
‘When Friends Shake Hands’
The potential for retaliation was one element of the Greenland saga that’s played out this month. Trump vowed to levy duties on goods from European countries that opposed his claim to self-ruling Danish territory, saying they’d start at 10% on Feb. 1 and ratchet up to 25% in June unless an accord was reached “for the Complete and Total purchase of Greenland.”
His fighting words caused anger and dismay among America’s European Union allies, who’d negotiated a trade accord with the US last year, and now said they would halt its approval. “In politics as in business, a deal is a deal,” EU President Ursula von der Leyen said. “When friends shake hands, it must mean something.”
Europe hasn’t lived up to its own end, according to US Trade Representative Jamieson Greer.
“The EU has failed to implement its commitments” despite rapid US moves to reduce its own tariffs, Greer said in a statement. The US and EU have “a number of foreign policy and economic matters that fall outside the four corners of the deal,” he said. “If the United States can compartmentalize important yet unrelated matters, the EU should not use them as excuses for noncompliance.”
European leaders floated other measures in response. Many of them gave Trump a chilly reception when he appeared Wednesday at the World Economic Forum in Davos.
Soon after, Trump announced an agreement that appeared to ease the tensions, though details aren’t entirely clear. Trump on Thursday promised he’d reveal more about the framework — but possibly not for weeks.
“I think right now Europe is breathing a sigh of relief,” said Josh Lipsky, chair of international economics at the Atlantic Council, a Washington think tank. “They stood firm, they put a package of retaliation together.”
‘Anyone Who Doubts’
Pushback on financial markets may have played a part, too – as it did in earlier episodes where Trump climbed down.
US stocks and Treasury bonds plunged early this week as the Greenland row escalated, then rebounded after a deal was announced. It was an echo of the original so-called “reciprocal” tariffs, which Trump rolled out in April with a fanfare only to quickly pause them amid market tumult.
Since then, Trump has backed down on enough threats that investors and financial markets have built that likelihood into their predictions. It’s been dubbed the TACO trade — short for “Trump Always Chickens Out.”
Asked about the label, the White House pointed to US military operations like the seizure of Venezuela’s president and the bombing of Iranian nuclear sites. “Anyone who doubts President Trump’s willingness to put his money where his mouth is when others refuse to strike a deal should go ask Nicolas Maduro or Iran for their thoughts,” said White House spokesman Kush Desai.
The president can point to a series of trade deals with major economies from Europe to Japan and South Korea wrapped up during his first year back in office. Some came with investment pledges, though they haven’t been fleshed out yet. The president says his protectionist policy will help revive US manufacturing, and tariffs are also collecting revenue for the government — another stated goal — at a rate of some $30 billion a month.
Another plus for Trump is that his new import taxes haven’t pushed up prices for US consumers as much as some pundits predicted. In part, that may be because the actual taxes aren’t as high as the ones that get announced.
As well as revoking or abandoning tariff plans, the administration has granted plenty of exemptions. A recent study co-authored by Harvard economist Gita Gopinath found that the effective rate on US imports as of September was only half of the statutory rate.
‘Rolex Came to See Me’
Some tariff threats have just been left hanging out there. For now that category includes Trump’s recent promise of a 25% charge on countries doing business with Iran, designed to pressure the government in Tehran after its repression of protests. The White House hasn’t released any additional information on the proposal. On a plane back from Davos late Thursday, the president told reporters it was coming “very soon.”
That’s an example of a “secondary tariff,” where pressure is applied not directly on the target country but on its trading partners – an instrument Trump is credited with inventing, but hasn’t really been able to use. He at times threatened to wield it against Venezuela and Russia too. But in all cases, doing so risks disrupting America’s own trade relationships and delicate tariff talks, including with giant economies such as China and India.
In Davos this week, Trump treated his audience to an example of how he used trade as a cudgel against his host nation Switzerland, after a rocky call with its leader.
“She just rubbed me the wrong way, I’ll be honest with you,” the president said. So he boosted the rate from 30% to 39%, “and then all hell really broke out. And I was paid visits by everybody. Rolex came to see me. They all came to see me.”
It’s an approach that may have to change a bit if the Supreme Court rules that Trump doesn’t have the authority to use emergency powers to impose tariffs, as he has been doing. In that event he’s expected to rely on other legal authorities, though none are as sweeping.
The volatility of Trump’s tariffs has worried even some pro-protectionists.
In a post published after the Greenland dispute, Oren Cass – who heads the conservative American Compass Institute think tank and has been supportive of Trump’s trade policy — warned that the threats toward Europe could rebound on the US.
Instead of restoring stability on new terms, “we now face the potential unraveling of deals already struck,” he wrote. “What point is there for another country to come to the table on trade, in response to tariffs, if it can expect to be hit again with the exact same tariffs even after resolving reasonable disputes?”
But Trump is framing Greenland as the latest evidence that his tactics work – which means Europeans, and others, should likely brace for more threats, according to the Atlantic Council’s Lipsky.
“They can wake up a week from now and he could say the tariff is back on,” he said. “Everyone lives with that.”
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