Tariffs Could Replace Sanctions as Trump Foreign Policy Tool, Researchers Say
The Trump administration may be beginning to favor the use of trade policy tools like tariffs to replace sanctions to compel foreign policy, researchers said on a podcast hosted by the Center for a New American Security last week.
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Emily Kilcrease, director of the CNAS Energy, Economics and Security Program, said that the administration doesn't "view sanctions as their go-to anymore, they’re much more interested in experimenting with tariffs as a coercive tool." She was speaking in reference to newly confirmed Commerce Secretary Scott Bessent's comment in his confirmation hearings that "sanctions seem to have gotten out over their skis," indicating that he believes they are overused in foreign policy.
Geoffrey Gertz, a senior fellow in the CNAS Energy, Economics and Security Program, said that it would be very interesting to see "what are the strengths and weaknesses of sanctions versus tariffs," and said he hopes for more clarity from the administration on their plans for these tools.
Kilcrease said that the opening actions of the Trump administration and Trump's promise in a recent memo to establish a trade policy that "enhances our Nation’s industrial and technological advantages, defends our economic and national security" are clear breaks with the Biden administration's approach to trade policy (see 2501210023).
“Trade and national security policy, particularly in the context of having China as our major foreign policy challenge, [cannot be treated] as separate siloed policy areas," she said. "These things are coming together and policy needs to reflect that and how we run the government needs to reflect that."
While the mentality of the new administration may be different, that may not mean that the Trump administration will shift away from all Biden-era policies. Kilcrease said that “there is a lot of continuity [with the Biden administration] particularly around national security, economic security policy tools such as export controls and outbound investment; there’s not a repeal [of executive orders] in this space.”
The researchers emphasized their organization's recent report that called on the Trump administration to negotiate new types of economic and trade deals that are centered on economic security issues, such as export controls and investment screening measures (see 2501230001).
Gertz mused on the future of TikTok, saying that “it is not entirely clear what the legal status [of the TikTok regulation] is," which "really matters for the companies that host TikTok," such as Oracle, Apple and Google, as the fines and penalties laid out in the congressional legislation are not just for TikTok but also for those companies affiliated with it (see 2501210051). He went on to say that a sale is still possible, particularly considering that the CEO of TikTok was invited to Trump's inauguration.
Kilcrease commented on the future of the aborted merger between U.S. Steel and Nippon Steel, saying that she was not surprised the parties turned to litigation but that most experts in the area agree that the case is a "long shot" because the courts don't get a say in reviewing national security decisions by the Committee on Foreign Investment in the U.S. (see 2501060040). She said that litigation is still a good idea for the companies because even if the courts rule against the companies, it creates an opportunity for Congress to take action and potentially put more guardrails on CFIUS when it comes to national security issues.