US President Donald Trump could be delivering a three-pronged attack in his trade warring in a bid to raise revenues, balance trade deficit, and bring his rivals to heel, CNN writes in a piece of analysis this week. The Trump administration is barreling down on a collision course to achieve three divergent goals, as difficult as they may be, leaving nations unsure about the best strategy to approach negotiations.

Raising revenues: Trump believes the tariffs will make up for lost revenues, as the US heads towards a huge budget deficit. The administration — which says that America is “subsidizing” other countries — predicts that the tariffs will bring in huge sums that could close the national deficit, which hit USD 711 bn in October 2024, up some 39% y-o-y from USD 510, according to US federal government data.

Balancing out the trade deficit: The US trade deficit went up around 17% y-o-y, reaching USD 918.4 bn in 2024, according to data from the US Department of Commerce. Imports came in at USD 4.1 tn, boosted by around USD 253.3 bn from 2023, while exports settled at nearly USD 3.2 tn, up by some USD 119.8 bn.

REMEMBER- The tariffs aren’t necessarily good news for US manufacturers, who will now face higher prices on imports. For example, the US steel and aluminum industries, which imported around USD 50 bn in steel and aluminum last year alone — are set to see their production costs rocket as a result of the recent 25% tariff targeting all imports of steel and aluminum.

Bringing rival countries in line: Trump likely believes that the threat of tariffs can “force countries to give up something he believes is in America’s best interest,” CNN writes. For example, he has justified the tariffs on Mexico and Canada as a countermeasure against what he says is the flow of illegal immigrants and the narcotic fentanyl into the US.

Confusion remains over what comes next: Countries targeted by Trump’s tariffs are trying to negotiate to prevent a possible trade conflict. Mexico and Canada have said they would work to limit the flow of fentanyl and undocumented migrants into the US. However, if the tariffs aim to raise revenues and balance trade, then they risk getting hit with tariffs regardless, the outlet explains.

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