The Tariff Gambit: Rhetoric, Reality, and the Road Ahead 

September 2025 

September and the Tariff Gambit

Growing up with test cricket teaches a lesson in patience: what matters is not the fireworks of the opening overs but whether the captains can survive five days of shifting conditions. Policymaking is much the same. A minister's speech is the opening delivery, sharp, dramatic, but often just moving through the air. The real contest begins later, when the pitch turns, the opposition digs in, and every decision, whether to defend, attack or declare, carries consequences beyond the scorecard. Policy, like cricket, rewards those who pace their innings, play their own game and wait for the one loose ball that changes everything.

September, then, is a fitting time to take stock. An unusually turbulent summer has rattled global politics and economics. After nine months in office, the Trump administration's trajectory is coming into view. The season has been anything but routine: a fast-track experiment in economic and geopolitical restructuring, played out at breakneck pace, with reverberations far beyond Washington. The strategic foresight of the Trump administration in this trajectory is both engaging and intriguing.

There is both resolve and bravado in this strategy. On one hand, it shows a striking willingness to arrest national drift and attempt a long innings to rebuild America's economic base. On the other hand, it is a high-stakes Test played under unsettled skies, where one reckless stroke could undo the gains. The opening overs have been noisy, full of swing, bluster and political theatre. Still, the real battle lies in the grinding middle sessions and the weary endgame, when the pitch deteriorates and stamina, not spectacle, determines survival. Who will emerge as the steady openers, who the slogging tailenders, and who the captain bold enough to declare at the right moment, remains uncertain.

Amid the barrage of headlines, partisan narratives swamp the airwaves, making it hard to separate signal from propaganda. Yet one rule of international affairs endures: interests matter more than sentiment. Nations do not trade on goodwill alone; they trade on necessity. A government may bristle with hostility, slap on punitive tariffs and rail against rivals, but still sign a deal if interdependence requires it. That pragmatic lens is the only one through which Washington's true aims can be discerned.

For six months, tariffs have dominated the news. The rhetoric has been apocalyptic; the reality, more modest.

Tariff Reality vs. Rhetoric

Despite the tough talk of sweeping tariffs, what we've actually seen are negotiated compromises: broad duties of around 10–15% with plenty of carve-outs, or holdovers like the long-standing 25% levy on steel and aluminium. The economics are simple enough—push tariffs too high and you don't boost revenue, you just choke off trade. Ironically, the only way to raise revenue is to keep trade flowing. In other words, you need globalization, however unpalatable that may sound in the political theatre. The oft-cited figure of $100 billion in tariff revenue is of little significance in the grand scheme of things than political fodder, deployed by figures like Bannon and Navarro to rally the MAGA base and build support for sharp policy pivots.

The Trump Playbook

One thing the Trump administration has grasped with unusual clarity is the sheer power of American consumers; their purchasing capacity remains the ultimate bargaining chip. Trump's trade tactics are built on exploiting this leverage, following a pattern that might be called: "Ask for the moon, deliver the roof."

The opening bid is always extravagant: hyperbolic threats of 20, 60, even 200 % tariffs, an "escalator to the moon" designed to shock both markets and counterparts.

Then comes the narrative theatre: shifting deadlines, escalating rhetoric, sowing deliberate uncertainty. Markets lurch at the spectre of crushing costs, while foreign negotiators scramble to interpret the real line of intent. This 'narrative theatre' is a strategic tool used to keep the opponents off balance and maintain a position of strength in negotiations.

Finally, the end state is reached: after cycles of escalation and retreat, the administration settles for incremental gains, a "ladder to the roof." The outcome is rarely transformational, but it produces marginally better terms, symbolic concessions, and optics that can be packaged domestically as major victories.

The genius of this dynamic lies in its psychology. Markets, primed to expect catastrophe, rally when the "final" tariffs land below the threatened extremes. Foreign governments are forced into defensive negotiations. And U.S. audiences, conditioned by the theatre of maximum escalation, perceive modest wins as dramatic breakthroughs.

The Economic Perspective of Tariffs: Offsets and Realities

Economists often describe tariffs as a hidden tax. In theory, every extra dollar shows up in the price tag and comes straight out of the consumer's pocket. But in reality, the impact has been softer than that, at least in the short run. A mix of deliberate policies and accidental offsets has cushioned the blow.

The traditional case for tariffs is straightforward: use them to counter foreign subsidies and keep the playing field level, or to give young industries temporary breathing room until they can stand on their own. Beyond that, companies have found ways to adapt. Many stockpile goods before tariff deadlines, reroute supply chains through third countries, or quietly absorb some of the costs to protect market share. This adaptability of companies in the face of tariffs should make the audience feel optimistic and forward-thinking.

Tariffs have also padded federal revenues, adding roughly $100 billion to government coffers. At the same time, other forces have kept headline inflation in check. Cheaper energy, lower rents, and falling used car prices have offset the added pressure from tariffs. A surge in AI-driven investment has further boosted growth, helping mask the drag from higher trade barriers. This resilience of the US economy in the face of tariffs should reassure and instill confidence in the audience.

For emerging market suppliers, the first shock has been swallowed through shrinking profit margins, though over time, price hikes inevitably filter back into the system. This creates a paradox: stock markets keep hitting record highs, even as the deeper numbers tell a different story. Roughly 80 % of tariff costs have landed on U.S. companies and consumers, while only 20 % have fallen on foreign exporters, a far cry from the rhetoric that tariffs punish foreigners alone.

At this stage, the strategy looks like a bold opening move. But the bigger question still hangs in the air: are tariffs just a short-term bargaining chip, or the first step in a lasting realignment of the global economy? To answer that, we have to shift from economics to strategy.

The Strategic Perspective: Reconfiguring Globalisation in a Multipolar World

The world is edging, almost sleepwalking, into a multipolar order. This is not a Berlin Wall moment, nor the onset of a cleanly drawn Cold War between America and China. Human history has more often been multipolar than bipolar. The 19th century offers the closest parallel: Britain was first among equals, but France, Prussia, Austria, Russia and a rising America balanced its weight. Rivalries were managed, alignments shifted, and spheres of influence overlapped.

Talk of America's "decline" is therefore misleading. Its military reach, financial clout and capacity for innovation remain formidable. What has changed is the backdrop. The head start it enjoyed in the late 20th century has narrowed; others are catching up. Relative power is diffusing, not collapsing. Advanced economies can plateau and still prosper, provided they focus on refinement, stronger welfare systems, demographic stability and targeted innovation, rather than chasing breakneck growth. Yet Western politics has grown over-engineered. Checks and balances multiply, bureaucracies sprawl, and crisis management has become a permanent condition. Authority is diffuse, eroding confidence and slowing action.

Into this drift, Washington has chosen to intervene. The old model of globalisation lifted billions but also left many behind, fuelling populist anger in the form of Brexit, populism and resurgent protectionism. Globalisation 1.0, roughly the past quarter-century, was the most powerful engine of prosperity in history, swelling the global middle class and rewarding those with capital to spare. But within countries, it also widened inequality. America consumed; others exported. The gains were uneven, and political consensus cracked.

What we have witnessed over the past nine months may be the laying of bricks for globalisation 2.0, whether as a natural outcome of trade restructuring or as an unintended consequence. The Trump administration's policies are reshaping trade routes and widening participation. For open economies to remain politically sustainable, however, the model must address inequality and restore a sense of inclusion. That means investing in training, adopting place-based industrial policies, strengthening social safety nets, and accepting that globalization will no longer resemble a frictionless, "borderless" textbook ideal. Instead, it will evolve into managed interdependence, with supply chains rerouted for security and resilience as much as for efficiency.

Within this context, tariffs have become instruments of realpolitik. They are no longer mere economic tools but a "utility knife" wielded for multiple ends: national security, bargaining leverage, and political optics. The result is policy incoherence: a single blunt instrument pressed into service against too many targets.

Today, China's economy is significant and diversified enough to absorb the shock. Trade accounts for a smaller share of its GDP than it did a generation ago, insulating it from external pressure. Yet supply-chain diversion is clear. Vietnam, Mexico, and other smaller economies have gained in the short run, though their reliance on U.S. demand leaves them vulnerable to cyclical swings.

Corporate strategy reflects this shifting landscape. China's historic advantages, low-cost labour, vast scale, and heavy subsidies are no longer decisive. Firms are diversifying production to Southeast Asia, India, Mexico, and, in some cases, back to North America. The calculus is straightforward: align output with demand centres, hedge geopolitical risk, and capture proximity advantages.

Paradoxically, U.S. tariffs are also prodding third countries into reform. India, Mexico, and even parts of Europe can no longer rely on the old model of U.S. consumption or protected domestic markets. They are being pushed to diversify trade, deepen South–South linkages, and reduce dependency on a single anchor economy.

The larger picture is a world where tariffs are not isolated policy measures but nodes in a wider strategic adjustment: the turn to multipolarity, the redesign of globalisation, and the reopening of capital cycles. They are tools in the contest to shape the rules of interdependence in the 21st century.

The Four Strategic Priorities

Beyond tariffs, tweets, and Trump, the strategic priorities for the next decade remain unchanged. The U.S. must rein in fiscal entropy, manage the delicate task of preserving dollar primacy in a multipolar world, reindustrialize, and secure its supply chains.

1.     Fiscal discipline: Bringing deficits under control, balancing social needs against fiscal realities.

2.     Dollar primacy: Preserving the dollar's role as the world's reserve currency, or managing its gradual transition without massive disruption.

3.     Reindustrialisation: Restoring production in high-value, strategic sectors while maintaining technological leadership through research, entrepreneurship, and education.

4.     Supply chain security: Ensuring access to and control over critical materials and production nodes to guarantee strategic autonomy.

In this framework, tariffs serve as a low-cost fulcrum, a lever for bargaining power, policy restructuring, and signalling resolve. Yet their effectiveness is finite. Overuse dulls credibility; misapplication risks eroding the very strategic aims they are meant to advance.

The task now is to examine those priorities in turn and assess how tariffs, together with broader policy choices, shape or distort them. From a long-term investment and asset-allocation perspective, the question is not only whether tariffs achieve short-term leverage, but whether they alter the underlying landscape of competitiveness, capital flows, and sustainable growth.