The American Tariff Strategy 
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A tariff is a tax on goods imported from other countries. There are 
two types of tariffs:

1. A protective tariff: set around 25-35% (or even higher), the 
protective tariff is intended to deter citizens from purchasing 
foreign goods. In general, the hope is that foreign goods will become 
so expensive that the citizenry will purchase locally-produced goods 
instead (this is called 'import substitution') and that domestic 
consumption will drive the local economy. If a protective tariff works 
properly, locals won't buy foreign goods and services and it will 
generate very little revenue.

2. A revenue tariff: this tariff is set much lower, at about 10-15%. 
The idea is that a minimal tax will have little impact on consumer 
behaviour. Citizens will continue to purchase foreign goods and pay 
the tax, which will flow to the government.

So the two kinds of tariffs have very different aims.

The Trump administration has imposed a mix of protective and revenue 
tariffs against countries around the world. But at the same time, the 
American Congress has passed legislation (the Big Beautiful Bill!) 
greatly reducing other forms of domestic taxation, which means that 
government revenue will decline. High protective tariffs will not 
generate enough revenue to recoup those lost taxes. So the aim of the 
Trump administration is now to negotiate trade deals that will reduce 
any protective tariffs to revenue tariff levels.

This is especially important in the case of major trading partners. A 
revenue tariff imposed on trade with Mexico, China, Canada, etc., will 
generate the funds necessary to replace lost tax revenues. This is 
what was achieved in the deals negotiated with the UK, Japan, and the 
EU. If you're an American trading partner, don't expect a free trade 
deal in the future. Expect a deal that lowers tariffs to revenue 
generation levels. That's now the entire aim of U.S. trade policy. 
Most crucially, trade representatives should be aware that the 
Americans _need_ to set tariffs at revenue-generation levels and take 
advantage of that knowledge during negotiations.