In his second term, Donald Trump expanded U.S. tariff policy from selective, China-focused measures to a universal, “reciprocal” baseline applied to nearly all trading partners. This expansion marked a fundamental change in how the United States uses tariffs as a tool of economic security. Although tariffs can strengthen national security and supply-chain resilience, the broad-based approach of the second term is less effective and more distortionary than the strategy used in the first. Targeted tariffs, by contrast, focus pressure on strategic sectors where foreign dominance poses significant national-security risks while minimizing the risk of consumer backlash. In my opinion, the U.S. should emphasize targeted, sector-specific tariffs over universal tariffs as it seeks to protect critical industries and strengthen supply-chain resilience.
Trump’s second-term tariff strategy represents a clear departure from the targeted, sector-focused approach that defined his first administration. In 2018-2019, during his first term, Trump imposed a series of targeted tariffs on steel/aluminium and Chinese goods. According to a report by University of Georgia, the U.S. “imposed 25% and 10% tariffs on all trading partners of steel and aluminium, respectively” on March 23, 2018 (Liu et al. 2022, p.3). On May 10, 2019, the U.S. increased tariffs on “$200 billion worth of Chinese goods […] from 10% to 25%” (p.6). In his second term beginning in 2025, the tariff strategy changed. A universal, “reciprocal” tariff baseline of 10% on nearly all imports—along with sharply higher rates on China, up to 125%—was applied, signaling a shift from selective lists to sweeping coverage.
Compared to universal tariffs, targeted tariffs are strategically more effective. One of the most important benefits of targeted tariffs is that they help the U.S. reduce its heavy reliance on adversarial supply chains in strategic sectors, which is risky for national security. Supply-chain shocks from the global pandemic and the Russia-Ukraine war exposed significant vulnerabilities in global supply chains, one of which is the excessive concentration in China. Through industrial policies such as “Made in China 2025”, China has created unfair price advantages for its strategic industries using heavy state subsidies and below-market financing. Today, strategic sectors like semiconductors, critical minerals, and defense components, are dominated by Chinese suppliers. Universal tariffs do not distinguish between sensitive and non-sensitive sectors, meaning they fail to focus pressure where supply-chain vulnerabilities are most dangerous.
Targeted tariffs are also essential for protecting advanced industries central to U.S. technological and military competitiveness. These high-tech industries need protection from predatory pricing. In sectors such as solar panels, batteries, and telecom equipment, China has a history of flooding global markets at below-cost prices. Generated fiscal revenue can also be reinvested into domestic industrial upgrading. Tariff revenue can support semiconductor subsidies, rare-earth processing, or critical-mineral stockpiles—all of which are critical for high-tech industries. Tariffs further help slow the transfer of sensitive technology to China by reducing joint-venture dependence and limiting exposure to Chinese suppliers, thereby protecting intellectual property and reducing technology leakage to its competitors.
A major concern has been inflation, but evidence shows that the inflation risk of tariffs has been overstated. U.S. firms have absorbed much the costs, leading to lower pass-through to consumer prices. Importers front-loaded shipments and built up inventories at pre-tariff prices, delaying and diluting the pass-through effects. In addition, foreign exporters reduced prices to stay competitive. A UNCTAD working paper on U.S. tariffs on China finds “some preliminary evidence that Chinese exporters may have started to bear part of the costs of the tariffs in the form of lower export prices” (UNCTAD 2019, p. 1). Supply-chain substitution also absorbed part of the shock. From 2017–2022, U.S. import patterns shifted away from China to alternative suppliers in Mexico and Vietnam (Freund et al. 2024). Together, these mechanisms show that tariff-driven inflation has been far more limited than predicted.
Although universal tariffs appear simpler and promise higher fiscal revenue, their economic and political costs outweigh these advantages. First, tariff-affected goods cover a smaller share of the CPI basket. The covered categories, such as furniture, appliances, electronics, and intermediate inputs, are small weights in overall CPI, so even large price increases would translate into small aggregate inflation contributions. Targeted tariffs, therefore, help avoid broad economic distortion. Broad tariffs act as a general tax on all imports, while targeted tariffs concentrate the policy cost where it matters most: national security. Furthermore, universal tariffs hurt large consumer groups and create strong public opposition. Reuters recently reported that the Trump administration had to reduce tariffs on “more than 200 food products […] in the face of growing angst among American consumers about the high cost of groceries” (Shalal and Lawder 2025).
While the U.S. should continue using tariffs to protect industrial industries vital to its national security and reduce dependence on critical choke points in global supply chains, it should direct pressure toward specific industries or trading partners. A universal, or “reciprocal”, tariff increases the risk of inflation and political backlash while doing a poorer job of strengthening supply-chain resilience. A strategy centered on targeted tariffs provides a more durable foundation for long-term economic security and technological leadership for the America.
References
Freund, C., Mattoo, A., Mulabdić, A., & Ruta, M. (2024). Is US trade policy reshaping global supply chains? Journal of International Economics, 152, 104011. https://doi.org/10.1016/j.jinteco.2024.104011
Liu, Y., Adhikari, S., Liu, J., & Escalante, C. L. (2021). Timeline of the United States–China trade dispute and tariffs on cotton and textile trade (Field Report C1259). University of Georgia Extension, Department of Agricultural and Applied Economics. https://fieldreport.caes.uga.edu/publications/C1259/timeline-of-the-u-s-china-trade-dispute-and-tariffs-on-cotton-and-textile-trade/
Nicita, A. (2019). Trade and trade diversion effects of United States tariffs on China (UNCTAD Research Paper No. 37; UNCTAD/SER.RP/2019/9). United Nations Conference on Trade and Development. https://unctad.org/system/files/official-document/ser-rp-2019d9_en.pdf
Shalal, A., & Lawder, D. (2025, November 16). Trump cuts tariffs on beef, coffee and other foods as inflation concerns mount. Reuters. https://www.reuters.com/business/trump-cuts-tariffs-beef-coffee-other-foods-inflation-concerns-mount-2025-11-14/