President Donald Trump’s “Liberation Day” announcement will certainly be etched into the history books. Not only were markets rattled, but dozens upon dozens of countries called the White House shortly thereafter, requesting urgent meetings on the newly imposed tariffs and negotiations to lessen them.

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Rumors abound as to what the true goal(s) of the President are. One thing is becoming clearer, however, with the US’s rejection of Vietnam’s offer to lower its import tariff on US products to zero – the US wants more. 

The US runs a $123.5 billion trade deficit with Vietnam. Even with tariffs lowered to zero, the US would still run a $120 billion trade deficit. The real protagonist in this story is not Vietnam; it’s China. China exports goods to the US through Vietnam to evade the tariffs the US has had on Chinese exports. White House trade advisor Peter Navarro emphasized “nontariff cheating” by Vietnam, such as the export of Chinese goods and intellectual property theft, as the primary concern. This suggests that the administration is using tariffs in some instances as a tool to reshape global trade and manufacturing practices. 

The advantage of the President’s strategy of enacting tariffs across the world all at once is it creates panic. That panic brings trade partners to the negotiating table en masse where multi-lateral negotiations can take place. Enacted one by one, the President’s supporters argue, would take too long and allow some nations to coast on – namely, China.

The costs of this strategy are tanking markets. The S&P 500 saw over 10% of its value slashed over three days. Drops like this have not been seen since the 2008 financial crisis and the COVID-19 pandemic in 2020. Every year that passes more and more Americans participate in the stock market. Pensions for an aging population are tied up in stocks, and retirees are rightly concerned when their nest eggs plummet by 10 to 30%. 

Business leaders are expressing increasing concerns about the potential negative consequences of these tariffs. BlackRock CEO Larry Fink suggested that the economy might already be in a recession, while JPMorgan Chase CEO Jamie Dimon warned that tariffs could lead to inflationary outcomes and slow down economic growth. Home Depot co-founder Ken Langone criticized the high import duties on Vietnam.

Negotiations should calm the markets somewhat, but US trading partners need to understand that zero tariffs are not the goal. US trade policy is after non-tariff cheating, and unless internal policies shift course, the US seems poised to maintain its central goal of weakening China. This entire strategy has always been about China.