Recently, President Trump used the threat of tariffs and other measures as a means of impelling Colombia into allowing an airplane carrying recently deported migrants to land in the country.  In the words of Karoline Leavitt, “[these] events make clear to the world that America is respected again.”  Trump and his supporters have argued that tariffs can be used as a means of generating revenue, reshoring manufacturing jobs, and, most relevant to this case, convincing other countries to change policies affecting the U.S. and its interests.  Indeed, when all you have is a hammer, everything looks like a nail. When it comes to the use of tariffs as a means of raising revenues or reshoring manufacturing jobs, the literature is unambiguous: tariffs do not work.  But when it comes to the use of tariffs as a negotiating tool, the literature is less one-sided, though cautions skepticism at a minimum if not outright doubt. Tariffs as a Negotiating Tactic Adam Smith offered perhaps the most cogent defense of the tariffs-as-negotiating-tool imaginable.  He wrote, “There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods.”  In simpler terms, Smith says that the use of tariffs and other trade measures can be good policy if 1) there is a good chance that their use will cause the other country to reduce their barriers to trade and 2) if the tariffs last a “short time.” He continues, saying, “When there is no probability that any such repeal can be procured, it seems a bad method of compensating the injury done to certain classes of our people, to do another injury ourselves, not only to those classes, but to almost all the other classes of them.”  Smith, to put it mildly, clearly did not believe that there was an argument that tariffs were wise economic policy in general.  He acknowledged quite clearly that they cause economic harm to the people of the country imposing the tariff. When to use Tariffs and Other Sanctions For Smith, whether to use tariffs as a negotiating tool was all about the likelihood that they would lead to the repeal of other countries’ burdensome trade policies that harm domestic consumers. Further, they were intended to be short-term policies, not standing policies or business-as-usual.  What affects this likelihood is certainly a multifaceted issue, but there is one critical piece of nuance that seems most relevant for consideration: the relative sizes of the economies involved in the dispute. Consider a country like China.  With a massive economy ($31.23 trillion) that exports billions of trillions of dollars worth of goods to dozens of countries around the world, U.S. tariffs do not represent much of a threat to them whatsoever. In fact, the U.S. accounts for only 15 percent of total Chinese exports and a mere 7 percent of Chinese imports. While it is true that the U.S. remains China’s top trading partner for both exports and imports, the simple fact is that they have alternatives for countries to trade with. Threatening to reduce Chinese exports to the U.S. through the use of tariffs will only lead to China sending their exports elsewhere.  Likewise, reducing Chinese imports of American goods would only cause them to import more goods and services from other countries instead. While we can say that this is not their preferred course of action, it is little different than U.S. consumers complaining about having to go to the other grocery store in town. Sure, the drive is slightly longer, but given a strong enough incentive, consumers will make the trek. Next, we consider a country like Colombia. With a current GDP of just under $1 trillion, their economy is dwarfed by both China and the U.S. ($25 trillion) and their economy is almost entirely dependent on maintaining strong international trade relations, particularly with the U.S.: 26 percent of their exports are purchased by the U.S. (Panama is second with 10 percent).  Likewise, 26 percent of their imports are purchased from the U.S. (China is second with 25 percent). Tariffs and other sanctions by the U.S. on Colombia impose a significant and real threat to their economic livelihood.  Businesses would shut down, and consumers already beleaguered by high prices against their low wages would see prices rise further and incomes fall. This would spell disaster for them, not just as a citizenry, but as a nation. As a result, that Colombia capitulated to Trump’s threats of tariffs and other sanctions is no mystery. Effects of Tariffs and Sanctions on China It is clear that the use of tariffs and other economic sanctions, particularly against China, is on the rise.  Indeed, every president since at least the year 2000 has imposed at least temporary tariffs on China.  Clearly, this is not a short-term solution to a problem.  But has it worked? Despite at least 25 years of “getting tough with China,” the simple fact is that they have not relented in the trade practices that we have tried to eliminate, like forced technology transfers and joint venture requirements. In fact, in a 2024 US Trade Representative report, it is reported that: The section 301 actions have been effective in encouraging China to take steps toward eliminating some of its technology transfer-related acts, policies, and practices and have reduced some of the exposure of U.S. persons and businesses to these technology transfer-related acts, policies, and practices. But in the very next bullet point, they say: China has not eliminated many of its technology transfer-related acts, policies, and practices, which continue to impose a burden or restriction on U.S. commerce. Instead of pursuing fundamental reform, the Government of China has persisted and even become more aggressive, particularly through cyber intrusions and cybertheft, in its attempts to acquire and absorb foreign technology, which further burden or restrict U.S. commerce. So have the Section 301 actions resulted in China actually changing their tune? It seems the only answer from the trade representative is a resounding, “No.” If anything, China has become “more aggressive” in the face of increased trade restrictions over the past 25 years, not less. The simple truth is that tariffs are an ineffective tool. They hardly generate any revenue, they certainly do not lead to the reshoring of jobs, and they are a lousy negotiating tactic.  It’s high time Trump put his hammer away and sought more nuanced (and effective) policy strategies. Hammers or Handshakes? Donald Trump presents himself as a savvy businessman. With the wealth, success, and notoriety that he has amassed, it is hard to argue that he is anything other. He should lead with his strengths.  Rather than continue to use the hammer of tariffs, he should instead replace it with handshakes. By finding more opportunities for bilateral reductions in trade restrictions, Trump could enrich the livelihoods of Americans, help reduce international tensions, and usher in a new era of peace and prosperity that anyone would be proud to call their legacy. READ MORE from David Hebert: DOGE Must Rethink Federal Spending: Prioritize Reducing Responsibilities v. Starving the Beast Through Tax Cuts Saving Us From Scheming Landlords? 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