As Russia is spared from tariffs, is Trump playing into Putin’s hands?

For the US president, trade tariffs and sanctions are different things, writes Mary Dejevsky – but focusing on fair(er) trade rather than separating the good and bad guys may yet come back to haunt him

Even before Donald Trump had finished reading out his tariff scorecard in the White House Rose Garden, the viewers – who included government officials all over the world – were trying to figure out the rationale. And, as with scores on the Eurovision Song Contest, to which this live show bore some resemblance, there was much reading of political runes.

The omission of Russia had to mean that the US president was still trying to curry favour with President Vladimir Putin, even though their early and long dialogues had apparently turned sour. The arrival of a senior Russian envoy, Kirill Dmitriev, in Washington was thought to be another reason why Trump had decided to give Russia a free pass.

Meanwhile, there was quiet satisfaction in the British camp that the UK was to be subject only to the base 10 per cent tariff, while the EU would be subject to 20 per cent. On the one hand, this had to be a vindication of Brexit, as well as a reflection of the Trumpists’ hatred of Brussels, and on the other, a tangible result of all the hard work put in by Sir Keir Starmer in presenting the UK’s case for minimal tariffs, if any.

However, if there was political significance to be divined in terms of rewards and punishments (or inducements and deterrents), some glaring inconsistencies rapidly became clear. If Trump had wanted to send friendly signals to Russia, how come North Korea, Belarus and Cuba were also exempt from tariffs? North Korea – well, perhaps Trump was preparing to reignite his first-term friendship with Kim Jong-un, but Cuba – where the first-term Trump had reversed Barack Obama’s rapprochement? And Belarus – really?

There were other instances of some mighty strange political signals being sent, if that was the intention. Why, for instance, impose the 10 per cent base rate tariff on Iran, while slamming a 17 per cent rate on Israel, Washington’s longstanding ally and Iran’s mortal enemy? Were we looking at a map of Trump’s maverick diplomatic intentions for the coming months, or was politics, or at least politics as commonly understood, not what was going on?

The more mathematically minded found a more consistent pattern in quite a different aspect of the Trump tariff table. They had done the sums and found that the tariffs could be explained by one simple formula – a calculation of the advantage to the countries concerned from the conditions of their trade with the United States and a tariff set at a level designed to even things up. This helped to explain why Iran, say, was treated with more apparent generosity than Israel and why Vietnam and Cambodia – both relatively poor countries, exporting cheap manufactured goods to the US – were being hit with some of the highest tariffs of all.

Such a formula could also help to explain why Ukraine, but not Russia, found itself on the wrong end of the US tariffs, and why Cuba as well as Russia was exempt. It also helped to clear up why tiny jurisdictions, such as the Arctic island of Svalbard or the Falkland Islands, featured in Trump’s list at all.

The volume of their trade with the United States might be negligible, but the balance of advantage fell foul of the Trump administration’s formula, their only consolation perhaps being that 10 per cent or whatever of a tiny amount is an even tinier amount, and the infrequency of that trade – as with a small island and a rare order of lobster – may mean that the particular tariff will never be invoked at all.

The US president is more likely to use sanctions rather than tariffs when it comes to persuading Vladimir Putin over Ukraine (Getty)

It would probably be fair to say, with all due humility, that the US president’s penchant for the televisual perhaps let him down here; that, in his keenness to help his global TV audience see what was going on, in the form of his scoreboard, the principles underlying the actual scores were not made as transparent as they might have been. This left it to the more numerate observers to explain the whys and wherefores in the hours that followed, leaving a time-lapse where some of the political theories gained a hold.

But there could also be another explanation for why Trump’s tariffs may have been misconstrued. One of the favourite words used to describe Trump’s way of doing politics has been transactional. So it was only logical that his tariffs were initially seen as a way of being nice to friends, being nasty to enemies, and encouraging those hardest hit to mend their ways. But it is only the third element that they were really about. It is entirely possible that flurries of bilateral trade negotiations will now follow. The UK, it appears, is still angling for a trade deal that would reduce or eliminate the tariffs, and others may well harbour similar thoughts. For those that don’t, the tariffs will stay.

If Trump is a transactional politician, however, his mind also seems to work in compartments. And what was going on with the tariff scoreboard in the Rose Garden was economics: this was a sweeping move to even up, as the US sees it, the terms of its trade with the rest of the world. No more and no less. Trump places politics in a different box, and that box has a secondary compartment labelled “sanctions”.

One of the reasons Russia and Iran were seen to get off so relatively lightly is because they have comparatively little trade with the US, and with Russia even less on terms disadvantageous to the US. If the US administration wants to encourage or punish another country, then the weapon it will reach for is sanctions – which can be toughened or relaxed at the behest of the US and may not be limited to what would commonly be defined as trade.

For Trump, trade tariffs and sanctions are different things and kept in distinct lanes. The purpose of the tariffs is fair(er) trade, not to separate good guys and bad guys.

If Trump feels the need to apply some duress or offer some encouragement to Moscow to agree to a ceasefire with Ukraine, sanctions in the form of blocked financial mechanisms and reprisals against its trade partners are the tools he has threatened – and could decide – to use. More sanctions, as far as they can be discerned from Moscow, are something Russia would prefer to avoid.