The modern application of tariffs by the United States, once intended as a regulatory mechanism to protect domestic industries, has increasingly evolved into a coercive diplomatic tool, weaponized to influence international behavior and policy. While historically used with mixed results, recent tariff escalations have demonstrated a destabilizing effect on both the US and global economy, as evidenced by declining growth projections from the International Monetary Fund and retaliatory actions by major trade partners. Rather than achieving strategic policy reforms, these tariffs have often triggered cycles of protectionism, eroded trust among allies, and inadvertently incentivized adversarial nations to deepen partnerships, as seen in shifting alliances across Asia, South America, and Europe. The imposition of tariffs, particularly those lacking coherent long-term objectives, has proven to be a blunt instrument, one that disproportionately burdens domestic consumers and weakens the US’s credibility as a stable trading partner.
The Weaponization of Tariffs
In recent years, the United States has increasingly utilized tariffs as instruments of economic coercion, particularly under the current administration. Tariffs, typically utilized strategically to level the economic playing field on the international stage, has been broadened to unprecedented levels, leading to significant disruptions in both domestic and global trade. The International Monetary Fund (IMF) reports that these trade policies have elevated US import duties to levels not seen in a century, adversely affecting global supply chains and increasing the likelihood of a US recession. The IMF projects economic growth of only 2.8% in 2025, as opposed to the 3.7% average, while the US economy is expected to grow by only 1.8% (Rugaber, Christopher 2025). This use of tariffs not only strains international trade relations, but also increases costs for US consumers and businesses, as the burden of tariffs is largely borne domestically (Fajgelbaum, Pablo and Amit Khandelwal 2021).
The repercussions of these scorched-earth tariff policies extend beyond economic metrics though, influencing diplomatic relations and geopolitical stability. US trade policies pervade every country, and in our globalized world economy, everyone is at risk when these policies endanger financial interests. Nations impacted most by US tariffs have implemented retaliatory measures, leading to a cycle of protectionism that undermines international cooperation, not only in terms of trade, but areas such as energy and security as well. For instance, China’s retaliatory tariffs on US goods (in response to the 145% tariffs placed on the country) have escalated tensions, affecting not only bilateral trade but also global markets (Fong, Clara, Noah Berman, and Anshu Siripurapu 2025). These tensions extend to other nations in terms of shifting partnerships, as nations seek to diversify and reevaluate their partnership with the US, as its reputation as a reliable partner wavers. Such actions have prompted concerns among economists and policymakers about the long-term implications of using tariffs as a foreign policy tool, suggesting that they may lead to a fragmented global economy marked by slower growth and chronic instability (Krueger, Anne 2025).
Brief History of US Tariffs
Historically, tariffs have been employed by nations as mechanisms to protect domestic industries and influence international policy. In the US, tariffs were a primary source of federal revenue from 1798 to 1913, accounting for 50% to 90% of government income over the course of this time period (Kennedy, Thomas, Alex Wolf, and Harry Downie 2025). The Smoot-Hawley Tariff Act of 1930, which raised US tariffs on over 20,000 imported goods, aimed to protect American farmers and manufacturers during the Great Depression. However, it led to retaliatory tariffs from other countries, resulting in a significant decline in international trade and exacerbating the global economic downturn (Office of the Historian 2016). The prices of many good rose, including eggs which was and still is one of the benchmarks used by economists and, more importantly, everyday Americans as a measure of the country’s economic health. An example of where tariffs were largely successful was in the use to protect domestic sugar production in the US. In the 1930’s under the Jones-Costigan Act, sugar import policy shifted dramatically to favor domestic producers, setting quotas on imports and, in the 1980’s, updated to allow additional imports but at exuberant tariffed rates (Krueger, Anne 1988). The US once relied on its Caribbean and Central American neighbors for most of its sugar imports, but through these controls, it developed a self-sufficient enterprise for sugar production (though this result has its own shortcomings and criticisms as well, beyond the scope of this paper).
Internationally, tariffs have also been used to exert political pressure. The Fordney-McCumber Tariff Act of 1922 increased US tariffs to protect domestic industries but inadvertently strained relations with European nations, making it more difficult for them to repay debts accrued during WWI (Office of the Historian 2016). Similarly, in the 1980s, the US imposed tariffs on a wide variety of Japanese products to address the growing trade deficit between the nations, though they inevitably failed to achieve their goals as the tariffs never addressed the underlying trade relationship US businesses and consumers had developed with Japan (Branstetter, Lee 2017). These historical instances illustrate how tariffs, while intended to protect national interests, can have unintended diplomatic consequences.
Moreover, the use of tariffs has often been a double-edged sword. While they can provide short-term protection for domestic industries, they may also invite retaliation and reduce the competitiveness of domestic products abroad. The European Union’s response to U.S. steel and aluminum tariffs in 2018, which included tariffs on American products like motorcycles and whiskey, exemplifies how such measures can escalate into broader trade disputes, affecting diplomatic relations and economic stability. A similar pattern has emerged with the current round of tariffs from the EU and Canada (European Commission 2025).
Tariffs as Tools for Fostering Cooperation
Despite their contentious nature, tariffs have occasionally been used to foster international cooperation, though it is the removal or reduction of the tariffs that typically results in cooperation; The adversarial pressure caused by tariffs meant to strong-arm dialogue in the first place. The Cobden–Chevalier Treaty of 1860 between the UK and France is a notable example, where both nations agreed to reduce tariffs, leading to increased trade and improved diplomatic relations. This treaty set a precedent for future trade agreements and demonstrated how mutual tariff reductions could serve as a foundation for cooperation (Timini, Jacopo 2022).
In the modern era, preferential trade agreements among developing countries have utilized tariff reductions to strengthen economic ties. The Global System of Trade Preferences among Developing Countries, established in 1989, aims to promote trade in the Global South by offering tariff concessions among member states. This initiative has facilitated increased trade and economic collaboration among participating countries, highlighting how strategic tariff policies, specifically the easing of Tariffs, enhance diplomatic relations and economic security (UN Trade and Development 2022). In another example, the EU’s long-standing tariffs on electric vehicles made in China, intended to protect domestic electric vehicle markets from being undersold, has recently accumulated into negotiations between the blocs in order to settle on prices that allow EU vehicles to compete (Blenkinsop, Philip, Maria Martinez, and Victoria Waldersee 2025).
In terms of the recent tariffs imposed by the US, there are examples of the US successfully leveraging tariffs in bilateral negotiations to address broader diplomatic concerns. For instance, recent meetings between US and Indonesian officials have included discussions on increased military cooperation, particularly tensions in the South China Sea. This of course followed only weeks after China and Indonesia held their own high-profile talks regarding its “2+2” regional military dialogue with Indonesia and South Korea. These agreements not only impact trade but also strengthen defense and security cooperation, though it is yet to be seen if this strategy can lead to lasting guarantees. Similar examples can be seen in the Philippines and Japan as military cooperation appears to be at the forefront of some discussions. In cases such as these, tariffs are leveraged to open doors to other concerns which may have been more challenging to engage with otherwise (Shakil, Ismail 2025). These examples underscore the potential of tariffs, when used judiciously, to serve as instruments for fostering international cooperation and addressing multifaceted diplomatic objectives., though these examples appear to be the exception rather than the rule.
Tariffs are a Gamble
The use of tariffs as a means to compel cooperation has often led to adverse outcomes. The US – China trade war initiated in 2018 serves as a prominent example. The imposition of tariffs on hundreds of billions of dollars’ worth of goods by both nations led to increased costs for consumers and businesses, disrupted global supply chains, and failed to achieve the intended policy reforms, such as addressing intellectual property theft. For example, the National Bureau of Economic Research found that over 90% of the cost of US-imposed tariffs on China during the 2018-2019 trade war was passed on to American firms and consumers, with no significant change in Chinese policy behavior (Fajgelbaum, Pablo and Amit Khandelwa 2021). Similarly, the U.S. tariffs on Canadian and Mexican goods in 2025, intended to renegotiate trade terms under the USMCA, resulted in retaliatory measures and strained diplomatic relations. These actions not only affected economic exchanges but also undermined trust among US partners, highlighting the limitations of using tariffs as leverage in diplomatic negotiations as they pivot to other partners to fill the economic gaps (Putzier, Konrad, and Justin Lahart 2025). It is no secret that tariffs largely fail when it comes to imposing policy change, lessons learned from the McKinley tariffs of 1890, which imposed levies of roughly 50% on most imports, were framed to pressure other countries into economic desperation, many economists of the time predicting Canada would join the US as a result; Sound familiar? (Brown, Courtenay 2025).
The weakening of the US’s soft power has also been widely observed. Arguably, one of the greatest assets of the US are the extensive partnerships that have been cultivated over the last century, which are continuing to sour as protectionist policies push nations to diversify and divest. China has taken the opportunity to strengthen its economic relationship in Southeast Asia, who are themselves leveraging the instability to gain more concessions from China, potentially fostering stronger partnerships in the midst of the economic burdens imposed by the US that threaten to destabilizing a regional economy heavily reliant on global trade (Ewe, Koh, Nick Marsh, and Astudestra Ajengrastri 2025). As discussed before, China has also pivoted to South Korea and Indonesia in terms of military cooperation, and has been joined by Japan as joint partners in applying pressure against the US in response to the recent tariffs (Tang, Francis 2025). Additionally, Brazil engaged in a joint military partnership with China for the first time at the height of the tariffs, proving that trade policies pose risks to military alliances as well. Furthermore, tariffs not only reverberate on the national level, but also in communities, as people in the EU and Canada have widely boycotted US products in response, and in part, fueled political opposition as seen in the latest victory of Liberal party in the 2025 Canadian Elections (though of course there are other pressing policy factors at play as well in this regard) (Harb, Ali et al. 2025).
It is important to remember that regardless of the success or failures of any one example of bilateral relations in regards to tariffs, the underlying pattern in response to the instability imposed by these policies. Overall, trade tensions initiated through tariffs are far less likely to result in successful diplomatic outcomes, rather nations are forced to seek economic alliances elsewhere (Tran, Hung 2025). Goodwill that has been fostered between long-standing partners can be soured quickly, meaning that even if a beneficial resolution regarding tariffs or military cooperation comes to fruition, any future partnerships might be avoided in favor of more reliable partners who don’t pose such a risk. It is these unseen partnerships that never come to fruition that are most at risk. Furthermore, the broad application of tariffs without clear strategic objectives can and has lead to global economic instability that hurts everyone, including the US, and us.
Limitations of Tariffs as Diplomatic Instruments
While tariffs are often framed as strategic tools for leveraging diplomatic negotiations, their inherent limitations frequently undermine their utility. Unlike multilateral agreements or targeted sanctions, tariffs are typically blunt instruments that affect entire sectors indiscriminately, impacting not just the targeted nation but also domestic producers, consumers, and international supply chains. Peer-reviewed economic studies have shown that in most instances, the costs of tariffs are disproportionately absorbed by the imposing nation’s own economy. Moreover, tariffs often invite retaliatory measures, entrenching adversarial dynamics and escalating trade disputes into broader diplomatic rifts. While tariffs may open diplomatic doors in some instances, evidence shows that far more doors tend to close.
Additionally, an unpredictable implementation of tariff policy can erode long-term trust and stability in diplomatic relations. Because tariffs can be unilaterally imposed with little warning or faulty justification, they introduce volatility that deters international investment and cooperation. Countries on the receiving end often perceive tariffs not as invitations to negotiate but as coercive acts of economic warfare, which hardens their negotiating stance rather than incentivizing compromise. Furthermore, as geopolitical alliances become more multipolar, unilateral tariffs may push targeted states into closer partnerships with rival blocs, reducing the influence of the imposing state and undermining long-term strategic goals. In sum, while tariffs may offer short-term leverage, their long-term diplomatic costs often outweigh their utility.
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