Trump Tariffs taxes or duties on imported goods 

 Tariffs — taxes or duties imposed on imported goods — have long been a tool governments use to regulate trade, protect domestic industries, and raise revenue.  But under President Donald J. Trump, tariffs have become much more than a routine aspect of trade policy. In 2025, Trump has revived and expanded tariff use globally, arguing they are a cornerstone of American strength: a way to make the United States “rich, strong, powerful and safe.”  Below, we examine the rationale behind Trump's push for tariffs — what he claims they accomplish — and the debates and challenges they have generated globally, for the U.S., and for other countries, including India.  

What Are Tariffs — and Why Governments Use Them Before diving into Trump’s case, it helps to understand what tariffs are, and what they can do. A tariff is essentially a tax levied on goods as they are imported from abroad.  Governments traditionally have used tariffs for two broad purposes: 1. Raise revenue — importing goods produces tax income for the state.  

2. Protect domestic industries — by making foreign-made goods more expensive, tariffs make domestically produced goods more competitive. This can protect jobs, foster local manufacturing, and reduce reliance on foreign suppliers.   

Throughout history, especially in the 19th and early 20th centuries, tariffs played a central role in many countries’ economic strategies to support nascent industries.  In modern times — with global trade rules, trade agreements, and membership in bodies like the World Trade Organization (WTO) — tariffs tend to be used more selectively: for protecting sensitive industries, addressing unfair trade practices, or as leverage in diplomatic and economic negotiations.   

What Trump Says: The Case for Tariffs Under Trump’s leadership, tariffs are not just a trade instrument — they are central to his economic worldview and geopolitical strategy. Here are the main arguments he and his administration make: 1. Restore American manufacturing jobs and reduce trade deficits A frequent claim by Trump is that decades of globalization and “free trade” have hollowed out American manufacturing. Factories relocated abroad where labour and production costs are lower; domestic industries suffered; many workers lost jobs. Tariffs, he argues, are a way to reverse that trend. By making imported goods more expensive, tariffs make American-made alternatives more attractive — boosting domestic manufacturing, supporting American workers, and reviving industries that had declined.  Additionally, the tariffs are meant to reduce huge trade deficits — situations where the U.S. imports far more than it exports. Trump and supporters believe that trade deficits mean the U.S. is being “taken advantage of,” essentially buying more from the world than it sells. Tariffs, in this view, help rebalance trade.  2. Raise revenue for government — and possibly use it for public benefit Unlike many modern economies where income taxes dominate, tariffs once served as a primary source of government revenue.  Under Trump’s expanded tariff regime in 2025, this revenue potential gained renewed focus. According to one estimate, tariffs could raise federal revenues by tens of billions of dollars, amounting to as much as 0.47% of U.S. GDP.  Indeed, as part of his pitch, Trump has floated the idea of returning some of the tariff revenue directly to American households — calling it a “tariff dividend.”  3. Use tariffs as leverage in global diplomacy, national security and trade negotiations Tariffs are not just economic tools — they are bargaining chips. Trump’s administration argues that with broad tariffs, the U.S. gains “all the cards” in international negotiations: it can push countries to change trade practices, curb illegal flows (like drugs), or accept favourable trade deals.  For instance, during his second term, Trump imposed tariffs under the broad authority of the International 

Emergency Economic Powers Act (IEEPA),

 claiming that large trade deficits and global dependencies constituted a national security threat.  4. Protect American sovereignty and reduce reliance on foreign production Part of Trump’s narrative is that global supply chains — especially for critical goods — make the U.S. vulnerable. Heavy reliance on foreign manufacturing can pose risks during geopolitical crises, pandemics, or supply-chain disruptions. Tariffs, by incentivizing domestic production, can reduce that vulnerability.  In sum, Trump presents tariffs as more than just taxes: they are strategic tools — aimed at job creation, economic sovereignty, government revenue, and geopolitical leverage.  

What Trump Has Done: The 2025 Tariff Push Under the banner of revived protectionism, the Trump administration rolled out sweeping tariffs in 2025. Some key actions: Effective April 2025, the U.S. raised its “effective tariff rate” from a nominal ~2.5% to ~27%.  Tariffs of 25% were imposed on imports from major trade partners like Canada and Mexico. In some cases, these tariffs were tied to concerns over immigration, drug smuggling, and border security.  Under IEEPA, the U.S. also imposed a 25% tariff on goods from countries importing Venezuelan oil.  The administration claimed these tariffs were not only economically motivated, but justified on national-security grounds — arguing that U.S. trade deficits and dependency on foreign supplies posed a threat.  

The goal: a bold repositioning of U.S. trade policy, away from decades of relative openness, toward protectionism and “America First” economics.  

Supporters’ View — Why Some Agree Supporters of Trump’s tariff strategy point out several perceived benefits: 1. Reviving industries and jobs: Higher costs on foreign imports can push American consumers and businesses to buy domestically made goods — giving a boost to U.S. factories, manufacturing, and employment. 

2. Greater self-sufficiency and economic security: Reducing dependence on overseas supply chains, especially for critical goods, can strengthen national resilience. 

3. Deriving revenue for public use: Tariff revenue could theoretically be used for public benefit — infrastructure, social programmes, or even returning money to households via a “tariff dividend.” 

4. Negotiating strength in trade diplomacy: With tariffs, the U.S. gains leverage in global negotiations — potentially forcing other countries to agree to fairer trade terms, stop harmful practices, or adjust trade policies. 

5. Addressing trade imbalances: Tariffs can discourage excessive imports and help rebalance trade deficits.  From this viewpoint, tariffs represent a long-overdue correction to decades of globalization that many believe hurt workers and domestic industries.  

Critics’ Concerns and Reality Checks While the arguments for tariffs are compelling to many, economists, businesses, and other countries raise serious concerns. Here are some of the most frequently cited objections: 

1. Higher costs for consumers and American businesses

 When imports get more expensive, the added cost often gets passed on — either directly to consumers (for finished goods) or to businesses (for raw materials and components). That means everyday Americans may face higher prices for many goods; and U.S.-based manufacturers may see their own costs rise if they rely on imported inputs.  This might undercut the benefit to domestic manufacturing, especially for industries that rely on global supply chains. Over time, it can lead to inflationary pressure and reduced purchasing power for average households. 2. Retaliation, trade wars, and damage to global trade When one country raises tariffs, others often retaliate. That triggers tit-for-tat trade disputes which can shrink global trade, disrupt supply chains, and harm exporters. Critics argue that a tariff-heavy U.S. could push other countries to retaliate — hurting not only the U.S. economy but global economic stability.  3. Legal and constitutional challenges One of the most consequential criticisms came from courts. In 2025, a significant portion of Trump's “global” tariffs imposed under IEEPA were struck down by a U.S. trade court. In the case V.O.S. Selections, Inc. v. Trump, judges ruled that those sweeping tariffs exceeded the legal authority of the executive and violated separation-of-powers principles.  That ruling places a serious legal check on the idea that the president can unilaterally impose sweeping tariffs under emergency or national-security laws — at least without clear congressional authorization. 4. Falling short of revenue expectations While tariffs were touted as a big revenue generator, actual collections have sometimes fallen significantly short of projections. For instance, recent estimates suggest that tariff revenues are roughly $100 billion less than what the Trump White House expected.  This undermines arguments that tariffs can easily fund government spending or social dividends without economic tradeoffs. 5. Impact on global trade, supply chains, and emerging economies Tariffs can have ripple effects across the global economy. Many countries — especially manufacturing hubs — find exporting to the U.S. more difficult. Global supply chains become more fragmented; costlier imports raise production costs worldwide. For many developing or emerging economies dependent on exports, this can reduce income, slow growth, and limit job creation.  For countries like India, this environment is complex: while there might be opportunities (if Indian producers are competitive), overall instability, higher costs, and volatility in trade flows can pose risks.   

What’s Happening Now: 2025–2026 — A Mixed Picture The ongoing developments around Trump’s tariffs show how contested and volatile the situation remains as of 2025: On one hand, Trump continues to assert that tariffs are central to U.S. strength, repeatedly stating that they made America “stronger and safer.”  On the other hand, many businesses — including large companies — are pushing back legally. For example, Costco has sued the U.S. government, seeking refunds on tariffs it paid, arguing that if the tariffs are invalidated by the courts, importers should get their money back.  The legal uncertainty is real: the courts have already struck down certain tariffs (e.g., in V.O.S. Selections case), stating that the administration exceeded its authority.  Meanwhile, economists highlight that tariffs may have unintended consequences: rising costs, disrupted supply chains, inflation, and slowed economic growth.  

In short: the strategy remains contested — politically, legally, and economically.  

What This Means for the World — and for Countries Like India

While tariffs are imposed by the U.S., their effects ripple across the global economy. Here’s how: Countries exporting to the U.S. — especially manufacturing-exporting countries — face uncertainty. Higher U.S. tariffs can make their goods less competitive, hurting export revenues. Global supply chains get disrupted. Companies may shift sourcing away from previously reliable suppliers to avoid tariffs, leading to supply-chain fragmentation. On the flip side, some countries might benefit if they manage to remain competitive. For example, according to one analysis, countries with lower exposure to U.S. tariffs — or those whose products remain relatively competitive — could see export gains to the U.S.  For India: some Indian sectors (textiles, garments, labour-intensive goods) might find opportunities if Indian producers can remain cost-competitive; but disruption in global supply chains, higher global economic uncertainty, and volatility in trade flows could pose risks.  

Thus, the Trump tariff regime contributes to reshaping global trade — with both potential winners and losers, depending on how countries, industries, and firms adapt.  

Tariffs as a Double-Edged Sword The case made by President Trump for tariffs is powerful and resonates with many: bring back manufacturing, defend American workers, reduce trade deficits, raise revenue, and reclaim national sovereignty. In a world shaken by globalisation’s ups and downs, by shifting geopolitics, pandemics, and supply-chain disruptions — tariffs feel, to some, like a return to control. Yet tariffs come with significant trade-offs: higher costs, disrupted trade, legal and constitutional challenges, global retaliation, and economic uncertainty. The outcomes remain mixed. Already in 2025, courts have struck down parts of Trump’s tariff program. Businesses are fighting back. Economists warn about unintended consequences. For the global economy — including countries like India — this means navigating a more turbulent trade landscape. There may be opportunities, but also considerable risks. Ultimately, tariffs may be more than just economic policy: under Trump, they are part of a broader reimagining of what trade, sovereignty, and national interest should look like in a shifting world. Whether that reworking leads to long-term gain — or costly disruption — remains to be seen.