“Trump and Harris and Tariffs, Oh My!”

Dan Mullaney, former assistant United States Trade Representative for Europe and the Middle East, answers the question to what extent Trump and Harris will use import tariffs.

By Dan Mullaney

“Now l don’t want to swear it, but it’s something that l heard
A gun in the first act always goes off in the third”

Peter Case. “Put Down the Gun”

Like Chekhov’s gun, tariffs will go off in the next act, regardless of who is elected U.S. President. Tariffs are now unholstered as a popular, if imprecise, trade policy tool: there is no going back to the self-restraint that characterized the not-so-distant past.

But there are significant differences in how the two candidates would likely approach those tariffs. A Trump administration would likely try to impose significant across-the-board tariffs presumptively, requiring strong reasons not to impose them in particular cases. A Harris administration, by contrast, would look at the relevant policy goals and consider whether increased tariffs can contribute to those goals, without presuming that increased tariffs are the answer.

The difference may be nuanced, but it is critical for trading partners. A Trump administration would view increased across-the-board tariffs as a way to (1) restore lost negotiating leverage vis-à-vis trading partners, (2) protect all U.S. manufacturing industries, (3) generate needed revenue to make up for tax cuts, and (4) incentivize foreign investment in the United States. Special deals with trading partners would (of course!) be on the table, but any deal would have to overcome a strong presumption in favor of increased tariffs.

A Harris administration, by contrast, would first consider the effectiveness of tariffs in achieving a specific policy objective, and would likely give greater weight to the costs of increased tariffs – the burden on U.S. industries buying foreign inputs, the impact on consumer prices, and potential retaliation from trading partners, among others. A Harris administration would also give greater weight to maintaining solidarity with allies like the EU, who could join forces with the United States on joint trade challenges, such as non-market economy policies and practices. A Trump Administration would also take these factors into account, but likely to a lesser degree.

Under either administration, of course, the question of domestic legal authority to impose tariffs will arise (as well as their consistency with international rules), but, as the last administration demonstrated, trade lawyers are nothing if not creative.

In sum, the successful policy arguments for shaping tariff policy in the next administration will be different, depending on which candidate wins, but there will be plenty of scope for doing so whatever the election’s outcome.

(One important caveat to this discussion is that if the EU imposes retaliatory tariffs on the United States in March in the absence of a steel and aluminum agreement, as it has threatened, or if it imposes charges on US trade, such as under CBAM or the Deforestation Regulation, or taxes on digital services, the response from either administration would likely be similar and emphatic.)

By the way, Peter Case’s song ends with “put down your gun and we’ll talk”.

Maybe some day!

Dan Mullaney is a nonresident Senior Fellow at the Atlantic Council’s Europe Center and GeoEconomics Center and former assistant United States Trade Representative for Europe and the Middle East.