So, I guess the real reason behind Trump’s tariffs have been pretty obvious all along.
I remember thinking when they were first being discussed that on their face – they made no sense. When it comes to bringing back manufacturing to the US – the final result from imposing tariffs is the same – either way – higher prices.
I even think I wrote something about Trump using this strategy as a bargaining chip – but not to help Americans – it had to be something else. But what?
Well, let’s rewind to 2018, when Trump kicked off his so-called trade war. Steel and aluminum tariffs were introduced under the pretense of saving American manufacturing. But then Treasury Secretary Steve Mnuchin let the truth slip — he said NATO allies might be exempt from tariffs if they increased defense spending to 2 percent of GDP.
Germany got hit with 25 percent tariffs on steel and 10 percent on aluminum. Poland too. And suddenly both countries opened their wallets – Germany committed to a one trillion euro defense plan as a direct response to the tariff pressure. Poland dropped more than 11 billion dollars on American-made military gear. Patriot missiles. HIMARS rocket launchers. F-35 jets. That wasn’t a coincidence. That was the business model.
Fast forward to today – and the scam has gone full throttle.
This past April, Trump invoked the International Emergency Economic Powers Act – IEEPA – and declared a national emergency based on trade deficits. That gave him sweeping legal authority to impose 10 percent tariffs on nearly every country we import from, affecting 71 percent of US imports compared to just 15 percent in his first term. But there was a loophole – he could waive or reduce those tariffs if a country agreed to buy U.S. weapons.
Just this month, Trump fired off official tariff threat letters to Japan and South Korea – 25 percent across the board unless they agreed to more American arms deals. He also demanded Japan quadruple its payments for US troops from about $2 billion to $8 billion annually. Both countries complied. Then came the Philippines agreement – according to Trump, they pay 19 percent tariffs while we pay zero, and in return they’re locked into a military partnership with us.
But the most aggressive move so far is the NATO-Ukraine arrangement.
Under this new deal, U.S. allies are buying billions in American weapons, transferring them to Ukraine, then replenishing their own arsenals by purchasing more U.S. equipment. All while facing the threat of “secondary tariffs” – up to 100 percent – if they trade with Russia. It’s a feedback loop of military spending where we get the cash, and they get the pressure. It’s less a defense strategy and more a geopolitical pyramid scheme.
And while Trump’s cronies celebrate the “wins,” the costs are mounting. NATO defense spending did increase by over $50 billion from 2016-2020, with countries meeting the 2 percent target rising from 6 to 23. Defense stock prices dropped about 3 percent during tariff events, showing even the defense industry is skeptical of this approach.
Meanwhile, Europe is already moving on.
The EU has largely excluded U.S. defense firms from its new €150 billion rearmament fund. Countries are rethinking F-35 deals, citing concerns about America’s reliability. And instead of strengthening alliances, Trump is pushing them away – right into China’s waiting arms. The US Court of International Trade even ruled IEEPA tariffs illegal this past May, showing the questionable legal foundation of this whole operation.
Yes – NATO defense spending has gone up. More allies are meeting that 2 percent goal. But the long-term damage is baked in. Trump’s approach has transformed U.S. foreign policy into a transactional grift – you pay us, or you pay the price.
So let’s be crystal clear: This was never about jobs. This wasn’t about national security. Trump has turned America’s trade policy into a global weapons hustle – and if you don’t buy in, you get punished. It’s working, in the short term. But in the long term? We’re burning bridges, bleeding trust, and handing competitors an open lane to take our place.
But my real question when reading about all of this was – how does it help Trump?
Because if you’ve followed him for more than five minutes, you know he doesn’t do anything that doesn’t benefit him personally. So what’s the payoff?
Well, start with the money. Trump’s inner circle is crawling with people who profit off defense deals – post-office slush funds disguised as private equity firms, media ventures, and foreign investments. Jared Kushner, Mnuchin, and a laundry list of donor-class cronies all benefit when countries are bullied into buying U.S. weapons. Trump doesn’t need to hold stock in Lockheed – he just needs to keep the grift flowing through people who owe him favors.
Then there’s the politics. Trump uses this strategy to craft an image – the guy who made NATO pay up. Who punished freeloaders. Who played hardball while everyone else played nice. It doesn’t matter that the long-term cost is trust, stability, and credibility – it looks like a win, and that’s all he’s ever chasing.
But, of course, this whole scheme didn’t originate with Trump. He didn’t come up with it – he’s not that deep. The bones of this racket were built by economic nationalists like Peter Navarro and Steve Bannon. It’s been cheered on for years by the Heritage Foundation. Trump didn’t invent this scam.
The International Emergency Economic Powers Act (IEEPA) has existed since 1977. It was intended for sanctions and true national security threats – but it’s vague enough to be twisted. Trump used it in 2019 to justify tariffs on Mexico. That was a test run. This past April, he expanded it to cover 71 percent of U.S. imports.
Back during the Cold War, the U.S. pushed allies to increase defense spending and buy American weapons. What’s different now is the overt linking of economic pain to arms deals.
The Heritage Foundation has long advocated for trade protectionism and defense expansion. They love this strategy – calling tariffs “radiation and chemotherapy” to save the Rust Belt.
Peter Navarro, Trump’s former trade adviser, has been screaming about trade deficits and China for decades. He wrote Death by China and was the architect of Trump’s original tariff policies. His fingerprints are all over this approach.
Steve Bannon also promoted this type of economic nationalism – where tariffs and trade wars are used to create national loyalty and destroy multilateral cooperation. He helped sell Trump on using chaos as strategy.
So, again, Trump didn’t invent this strategy – he just branded it, monetized it, and turned it into a global extortion racket. The payoff comes through political wins, donor loyalty, and control over allies.
Like always – Trump’s not building a legacy. He’s running a hustle.