The history of tariffs in the United States can be traced back to 1789, when Alexander Hamilton viewed them as a solution to two crises facing the nascent republic: an urgent need for revenue and a desire to industrialize a nation that appeared overly dependent on England. But in modern times, they have almost always been a negotiating tool — an economic coercion used in the service of diplomacy, a stick to force other nations to the negotiating table. What sets President Trump’s action against Mexico, Canada, and China on Saturday apart is his apparent disinterest in seeking deals. At least for now, in his view, tariffs are the goal, a means to strengthen the nation’s finances as he simultaneously seeks territorial expansion and strategic advantage over an increasingly assertive China. This was clearly stated in his Inaugural Address, just 12 frantic days prior. ‘Instead of taxing our citizens to enrich other countries,’ he said, ‘we will tariff and tax foreign countries to enrich our own citizens.’ He also outlined his plan to establish an ‘External Revenue Service,’ and recently mused to reporters that income taxes might wither away as tariffs become the main sustenance for America’s $6.8 trillion annual federal budget. Mainstream economists largely remain skeptical of Mr. Trump’s faith in tariffs as a game-changing tool for raising revenue or as an effective means of nurturing the return of domestic industries that have withered under global competition.
Read from: https://www.nytimes.com/2025/02/01/us/politics/trump-tariffs-goal.html