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with the election approaching, former us president and republican candidate donald trump has been making promises one after another. however, tariffs remain his biggest weapon.

trump pioneered the use of tariffs as a tool of state governance during his presidency. a bloomberg commentary pointed out that nowhe has repeatedly promised that if he wins a second term, he will do his best to use this tool and even use a more powerful tariff weapon to protect the dollar.

trump has hinted on the campaign trail that he will strengthen the u.s. economic arsenal if he defeats opponent kamala harris in the november election. although trump imposed a large number of sanctions during his first term, he now prefers tariffs as a means of solving problems, calling them "excellent" and downplaying the role of sanctions.

trump said tariffs would bring various benefits to the country, such as providing the money needed for a new sovereign wealth fund or offsetting the revenue lost from the income tax cut. economists are skeptical, saying that trade barriers will slow growth, weaken profits, push up prices and squeeze consumers. however, this did not stop trump from getting straight to the point in answering the first question of tuesday's debate:“i have tariffs, but i don’t have inflation.”

but on the international stage, the tariff threat will resonate even more. with a new cold war looming and the world economy splintering, recent u.s. presidents have continually sought new ways to weaponize america’s economic and financial influence. trump has said he will scale back some of those measures, but only because he has his eye on new, potentially more destructive ones.

“we’re going into the unknown,” said heather conley of the german marshall fund of the united states. “not just tariffs and sanctions, but using industrial policy and protectionism to help protect the economy and competitiveness in the future.”

trump’s first-term agenda has focused on recalibrating trade with china, and he has vowed to continue to impose tariffs on china. but during his presidency, there have been signs that he sees tariffs as a tool to solve problems unrelated to trade.

in 2019, trump threatened to impose tariffs of 5% on mexican goods, then steadily increase them until illegal immigration across the border was curbed. the two countries soon reached an immigration agreement, and the tariffs trump threatened were never implemented. trump clearly envisions wielding this stick more frequently in a second term.

trump has specifically targeted countries that try to trade outside the u.s. dollar financial system with a striking new idea: imposing a 100% tariff to prevent those countries from shunning the dollar.

"we are going to maintain the dollar's status as the world's reserve currency, and now the dollar is under great siege," he said at a rally in wisconsin. he stressed that tariffs will become an important means to maintain the dollar's global control.

essentially, the idea is to use access to the lucrative u.s. consumer market to maintain the dollar’s ​​grip on the world economy, rather than fueling sanctions fatigue and putting the dollar at risk.

for a businessman like trump, the appeal is obvious. tariffs are relatively easy to start and stop, making them an effective carrot-and-stick bargaining tool, and the president can adjust them without the involvement of congress. but some analysts predict that if trump tries to go too far in this regard, he may encounter legal obstacles.

the downside is that the targeted country could respond with a tit-for-tat response, hurting u.s. exporters. more importantly, adversaries like iran don’t export much to the u.s. market anyway.

unlike tariffs, sanctions are less flexible, and even if they are lifted, it will be hard to convince companies that it is safe to invest in a country that has been at odds with the u.s. however, in a dollar-centric trading system, other countries have less room to retaliate against sanctions.

“strange uses”

a global backlash against u.s. sanctions has become increasingly evident after the united states and the european union took a series of punitive measures against russia, freezing its central bank reserves and targeting thousands of officials and companies with sanctions.

the brics group of major emerging economies, which includes china, india and russia and is steadily adding members, has made it an explicit goal to trade in currencies other than the u.s. dollar. oil giant saudi arabia is considering an invitation to join, and nato member turkey is one of the latest to apply.

while the brics have not yet abandoned the dollar or found an alternative currency to use in unison, their efforts have stoked fears about the greenback’s status and caught trump’s attention.

trump's proposed solution, threatening to impose 100% tariffs, has been widely criticized in the united states.

“it would be a strange use of tariffs and could have the opposite effect of encouraging countries to use less dollars and thus be less exposed to the vagaries of u.s. policy,” said eswar prasad, a senior fellow at the brookings institution and author of “the dollar trap: how the u.s. dollar strengthens its grip on global finance.”

such a move “would be hugely disruptive to the global economic system,” commerzbank strategist ulrich leuchtmann said in a note to clients.

after the devastation caused by tariffs during trump’s presidency, a bipartisan appreciation for what they can accomplish has emerged. biden has largely kept the tariffs trump imposed and added some new ones, and harris has so far given no indication that she would change course if she became president.

financial sanctions also have a republican-democratic consensus. their use has risen sharply since the early 2000s, leading adversaries and even some allies to wonder whether their reliance on the dollar makes them overly beholden to u.s. foreign policy goals.

trump is not the only one concerned about the united states' frequent use of sanctions to weaken this powerful weapon.

at a congressional hearing in july, u.s. treasury secretary janet yellen spent hours trying to dodge questions from lawmakers, more than a dozen of whom called for tougher sanctions on certain countries. toward the end of the session, the treasury secretary was asked what her biggest concern was about the international financial situation.

yellen responded: “because of the important role of the dollar, we have very powerful sanctions tools, and the more we use sanctions, the more countries will find ways to engage in financial transactions that do not involve the dollar.”