Transformed into a tool of geopolitical domination, U.S. trade policy sows the seeds for backlash
Brahma Chellaney, Nikkei Asia
For U.S. President Donald Trump, trade diplomacy has become less about markets and more about American might. By weaponizing tariffs, sanctions and investment rules, he has turned trade policy into a tool of coercive statecraft — one that seeks to realign global power relationships in favor of America’s short-term geopolitical goals.
Trump’s approach treats trade as subservient to geopolitical strategy. Tariffs and threats of economic punishment are deployed as geopolitical levers not only against adversaries such as China and Russia but also against allies like Canada, India, Japan and Mexico. His administration even invoked a national emergency to justify using tariffs as a coercive instrument, underscoring how far the traditional lines between economics and security have blurred under Trump.
During his Tokyo visit late last month, Trump praised Japan’s pledge to buy “a very large amount of U.S. military equipment,” adding that “we very much appreciate the trade.” The remark revealed a profound transformation in international economic relations. Under Trump, bilateral trade agreements no longer revolve around tariffs or market access. They have become political contracts to secure vast foreign investments and military purchases, binding allies into Washington’s orbit and curtailing their policy autonomy.
The scale is striking. Japan has committed $550 billion, South Korea $350 billion and Malaysia $70 billion in U.S. investments, while Southeast Asian partners have agreed to buy American aircraft, weapons and energy products worth tens of billions. The Japan deal even allows Trump to decide how Tokyo’s money is invested and grants Washington 90% of profits once Japan recoups its outlay. As U.S. Commerce Secretary Howard Lutnick conceded, Japan would have to “blow up their balance sheet” and borrow money to meet the obligations.
Such arrangements amount to economic vassalage disguised as partnership. Japan bears the debt burden and financial risk while the U.S. captures the profits and dictates deployment of capital according to its strategic priorities, rather than commercial logic. Trade diplomacy under Trump has effectively become an instrument for extracting tribute in the guise of cooperation.
Trade has also turned into a selective punishment tool. India has been singled out for secondary U.S. sanctions over its Russian oil imports, even as the European Union, Japan and Turkey continue major Russian energy purchases. The EU has been given a comfortable transition period until January 2028 to phase out Russian energy — a timeline unlikely to hold if the Ukraine war ends earlier. The inconsistency exposes Trump’s trade coercion as driven by geopolitics, not principle.
Sanctions and tariff threats now serve as levers of intimidation to extract concessions through fear of economic harm. This form of “negotiation” allows Washington to tilt deals decisively in its favor, securing asymmetric outcomes that entrench dependence. The approach underscores a revival and global extension of the 19th-century Monroe Doctrine.
The line between economic diplomacy and interference in other nations’ domestic affairs has also blurred. Trump has linked his 50% tariffs against Brazil since July to the legal proceedings against former far-right President Jair Bolsonaro. And in Argentina, Trump conditioned a $20 billion American aid lifeline — one of the largest to any country since World War II — on the success of President Javier Milei’s party in the recent legislative elections. Trump’s success there can only embolden similar tactics elsewhere.
Recent U.S. trade deals with Cambodia, Malaysia, Thailand and Vietnam signed during Trump’s recent Kuala Lumpur visit illustrate the fusion of commercial and security goals. In exchange for Washington lifting tariff threats, these nations accepted economic and strategic concessions aligned with U.S. interests. The Cambodia deal even included lifting a long-standing arms embargo and resuming joint military drills, marking a full integration of defense and trade policy.
Each of Trump’s trade deals shares the same blueprint: partner nations make concrete economic and strategic commitments, while the U.S. retains both significant tariff barriers and the power to adjust or revoke terms unilaterally. The accords extend well beyond traditional trade matters to encompass investment quotas, defense-procurement obligations, critical-minerals cooperation and compliance with American sanctions and export-control policies. Defense procurement commitments, for example, will deepen technological dependence on U.S. weapons systems, making it ever harder for partners to pursue independent security policies.
For countries heavily reliant on U.S. markets, the choice is stark: accept constrained sovereignty in return for economic access, or resist and face punishment. Worse still, the new agreements lack the legal grounding and bipartisan consensus that once lent durability to American trade pacts. They are politically fragile and inherently imbalanced.
By treating allies less as partners than as instruments of leverage, Trump is corroding the foundations of alliance solidarity. Overtly coercive and transactional trade relationships breed resentment and erode the trust that sustains long-term cooperation. Allies begin to see engagement with Washington not as an expression of shared interests but as participation in a protection racket: pay the tribute or face economic retribution.
The inevitable consequence is blowback. Nations are already hedging against overdependence on the U.S. by diversifying trade and defense ties with other powers. The perception of America as an unreliable and self-serving partner is accelerating the global shift toward multipolarity. Ironically, Trump’s efforts to consolidate U.S. dominance are hastening its erosion.
In many ways, Trump’s model of weaponized trade diplomacy resembles China’s Belt and Road Initiative — only more unabashedly coercive. While Beijing used loans and infrastructure projects to bind partners, Washington now employs tariffs, sanctions and investment dictates. Yet just as China’s debt-trap diplomacy provoked geopolitical backlash, Trump’s heavy-handed economic unilateralism is likely to face mounting resistance.
By overplaying America’s economic might, Trump risks undermining its global leadership. Coercion can yield short-term compliance but it destroys the mutual confidence and reciprocity that sustain long-term influence. The paradox is unmistakable: the more the U.S. weaponizes its economic power, the faster the world will adapt to limit its reach. In the end, America’s own overreach could prove the greatest driver of the multipolar world order Trump seeks to resist.
Brahma Chellaney, a professor of strategic studies at the independent New Delhi-based Centre for Policy Research and fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including “Water: Asia’s New Battleground,” which won the Bernard Schwartz Book Award.