How Much Leverage Does the U.S. Have in New Trade Wars?

By Felix Richter – Statista

Historically, tariffs have primarily served two purposes, which were to raise revenue for the government and to protect domestic industries from foreign competition. President Trump has a decidedly different view of tariffs, as he considers them a bargaining chip in political disputes. In the early days of his second administration, this has become clearer than ever, as Trump is once again using tariffs to wield economic power in pursuit of his political goals.

When he announced the implementation of a 25-percent tariff on all imports from Canada and Mexico and a 10-percent additional tariff on China on February 1, it wasn’t to raise government revenue or protect U.S. industries, but to stop what he describes as “the flood of illegal aliens and drugs” from pouring into the United States. During his campaign, Trump has repeatedly blamed Mexico, Canada and China for their respective roles in the illicit fentanyl trade and the latest tariffs are his way of forcing them into action.

So exactly how much leverage does the U.S. have potential trade wars with Canada, Mexico and China?