Editor’s Note: Jason Schenker is a top-ranked economist, bestselling author, futurist, and recent BSCAI CEO Seminar speaker. The following excerpt is from a feature article published on Forbes and is being republished with permission.

Tariffs Are An International Trade Policy Intended To Increase U.S. Economic Security

While the intention of U.S. tariffs is to shore up economic self-sufficiency, power, and security, the threat of tariffs hangs like an international trade policy sword of Damocles — a peril that balances the precarious nature of power and a threat of looming disaster — above major U.S. trade partners, creating an atmosphere of uncertainty in global markets.

As a negotiation strategy, no deal is done until it’s done, and no policy is enacted until it is enacted. Unfortunately, while this approach gives the U.S. leverage, it also makes business planning highly unpredictable for global supply chain businesses, including manufacturing and material handling industries.

The goal behind using U.S. tariff threats is to yield concessions from trade partners to improve U.S. economic security and national security.

These U.S. policies appear to be a response to the geopolitical coordination between China, Russia, Iran, and North Korea, which began in earnest on Feb. 4, 2022, with the Joint Statement of the Russian Federation and the People’s Republic of China on the International Relations Entering a New Era and the Global Sustainable Development. The Russian war on Ukraine began during the same month, which has been followed by further coordination between these countries.

China’s evolving geopolitical maneuvers, including its military posturing and threats to Taiwan, China’s growing alliances through BRICS, the soft power projection of the Belt and Road initiative, and goods-dumping and tariff-evading trade policies that distort global markets and undercut U.S. industry.

By leveraging tariffs, the U.S. aims to counterbalance China’s economic influence and strengthen domestic supply chain resilience.

Because this has proven to be an effective negotiation strategy, we should expect to see more of it in the future.

Future Tariff Announcements To Drive Concessions

Trump has promised to announce across-the-board U.S. tariffs on its trading partners. It seems very likely that those tariffs are primarily intended to encourage geoeconomic cooperation to clamp down on Chinese economic influence, goods dumping, and tariff evasion through the use of transshipments.

It may seem odd to think of Trump as the Eliot Ness of international trade, seeking to stop Chinese tax evasion (i.e., tariff evasion) through transshipment, but that may be closer to reality than may appear at first glance.

In addition to stopping Chinese tariff evasion, Trump has voiced support for setting U.S. tariffs at reciprocal rates, which aligns with the Reciprocal Trade Act introduced in the House in January. However, despite multiple references to tax revenue from tariffs, the primary goal of these U.S. tariff announcements is likely to encourage U.S. trade partners to make concessions, which seem likely to include a mix of economic security, national security, geoeconomic, and tariff concessions.

For this reason, Trump may postpone or otherwise defer tariffs for some countries even without reciprocal tariff reductions so long as other geopolitical or geoeconomic concessions that support U.S. national security or economic security aims can be gained.

While tariffs have been threatened and applied, economic security is likely to be best served by preventing detrimental tariffs from being applied to U.S. military and geoeconomic allies as well as potential countries that could be brought into alignment with U.S. economic security and national security aims.

Future Tariff Impacts Depend On Implementation

The size of the impact that U.S. tariffs (and resulting retaliatory tariffs) have on U.S. inflation and growth will depend greatly on the timing and duration of tariff implementation.

Any negative impacts on U.S. growth and inflation from U.S. tariffs and any reciprocal tariffs will hinge directly on when, if, and for how long they are implemented.

For now, the most significant economic and business risks stem from planning difficulty and business uncertainty against a backdrop of trade wars and geopolitical risks designed to counterweight growing risks from China’s coalition of Cold War Two allies.

Despite significant support from some business leaders for Trump, tariffs are largely unwelcome. However, the trade and tariff policies are about more than near-term business activity. Like it or not, they are the sword and the shield of the Trump administration’s path to shore up economic security and national security.

Read the full article here on Forbes.

Jason Schenker is a top-ranked economist, leading futurist, in-demand keynote speaker, and bestselling author. He is the president of Prestige Economics and chairman of The Futurist Institute. Mr. Schenker is a LinkedIn Top Voice, and 1.3 million students have taken his LinkedIn Learning courses on economics, finance, AI, and technology. He has authored and edited 36 books.  ‘The Future of Finance is Now,” “The Future of Energy,” “Jobs for Robots,” and “Futureproof Supply Chain” are among his 15 bestsellers. Since 2011, Bloomberg News has ranked Mr. Schenker the #1 forecaster in the world in 27 categories for his forecasts of the U.S. unemployment rate, U.S. non-farm payrolls, the euro, crude oil prices, industrial metals prices, and gold prices. He has given over 1,200 keynote speeches and countless television interviews, including as a Guest Host on Bloomberg. Mr. Schenker holds the CFP, ERP, SCR, FEI, and FLTA professional designations.