Brood with me on the drift of US foreign economic policy in the upcoming administration of Donald J.Trump. What, exactly, do those impending tariffs portend? Economists tend to treat tariffs as good or (mostly) bad according to general precepts of economic theory. But as Trump definitely understands, in the real world they also serve political goals.

Trump has threatened twenty-five percent tariffs on day one against both Mexico and Canada. His political motives are fairly transparent. He wants to compel Claudia Sheinbaum to seal the border, block migrants and accept deportees, including many who will not be Mexicans. To this, in some version, she will probably agree. Against Canada, one goal is to humiliate and destroy Justin Trudeau.

This too, a punishing tariff can achieve. And if the tariffs apply to hydrocarbons, a major import from both countries, that will boost prices and profits in the Permian Basin, spurring drilling as part of Scott Bessent's 3-3-3 plan.

Against China, new tariffs can't do very much. China is a vast country with export competitiveness throughout the world; it is long past sole dependence on the US market. Xi Jinping could, if he chose, offset new tariffs with a downward float of the RMB, but he will (probably) not let that go too far, so as to avoid destabilizing speculative capital movements and higher import prices for food and fuel. More likely, China will shift, even further, toward non-US markets, while the US shifts its imports toward Vietnam, Bangladesh, Thailand, Indonesia, the Philippines and other suppliers.

US consumers will lose out mainly on products they've never seen, like BYD electric cars (already selling in Mexico for about $21,000) and Huawei phones. For more serious matters, like control of the world semiconductor supply chain, there is the small fact that China, not the US, holds high cards called gallium, germanium, antimony, cobalt and many other essential minerals.

However, tariffs against China will surely be raised. This is not because they will be successful, but because US politics will demand it. The China hawks will be happy, and China's march to the front ranks of world technology and industry will continue. This is what is sometimes called a “win-win”.

Still, the lynchpin of Trump's tariff policy, I believe, is not Mexico, Canada or China, but Europe. tA tariff wall, combined with cheap and reliable energy, lower interest rates, low union density, steady economic growth and a strong research and development base, will draw Europe's industrial corporations, and especially those of Germany, to build new factories in the United States, even as  hey shrink their operations in their now-unprofitable homelands. Gradually, their supply chains will also close down – for German firms, notably in Italy – and relocate to North America, including to Mexico once difficulties over the border are resolved. This process is already underway; the Trump-Bessent policies, taken as a whole, seem tailor-made to speed things up.

What then will happen if and as Russia continues to advance in Ukraine? Trump seems to be adjusting his once-confident view that he can freeze the war and end the fighting in a day. He may realize, soon enough, that Russia's government is undeterred by threats and bluffs. He probably knows that sanctions failed. With the present correlation of forces, a US nuclear option would be suicidal and one hopes that Trump also understands this.

So, what would be the material consequences for the US when Ukraine falls? They will not be very great. The main cost of reconstruction will fall on Russia, in the territories it has annexed, which is where the war was largely fought and the damage greatest. The west of Ukraine will be a problem  for its neighbors, notably Poland. The refugees will mostly go to Europe. Military contractors will lose a market, but they have many others. It seems unlikely that these prospects bother Trump very much.

Of course, it would be an emergency if the Russian Army were to move on from Ukraine to Poland. But Trump and his team may grasp that Russia's interests stop at NATO's borders; indeed, that Russia's interest in Europe – including in the tiny Baltics – is by now no greater than their own.

Looking ahead and putting the pieces together, what will be US grand strategy under Trump? First, perhaps, to consolidate Israel's recent gains after the fall of al-Assad in Syria, weakening Iran so far as possible, while strengthening the US position in the Gulf and on Russia's southern flank. If Iran falls, so much the better, as then China will take a hit on its energy supplies and costs.

Second, to secure the “Indo-Pacific” ring around China, building trade and military relations and agitating to keep China preoccupied with Taiwan, Xinjiang and other convenient troubles. Third, to contest Russian influence in Africa and China's in Latin America, while squeezing Venezuela and Cuba hard, in the hope that those regimes might finally collapse. A breakthrough in any sector, or even so minor a one as Nicaragua, would count as a big victory for Trump and Rubio.

Europe, the UK, and NATO itself have little use in any of these parts of the world. Indeed, they are an annoyance and an impediment, a burden not a benefit, in the eyes of Trump-land. It was Joe Biden who tried to restore American leadership of its “traditional allies” and “fellow democracies.” Does Trump care? In an interview with NBC on December 6, Trump made it clear that he does not.

If Europe and the UK sink into recession, social disorder, poverty, and crises of demography and migration, including from Ukraine, so what? Such things are already underway and can't be stopped.

The British and French empires disappeared long ago, and what is left of French influence in Africa is unraveling; there is little there to take over. Europe itself has few natural resources and not much technical superiority worth working to preserve. Moreover, if London declines as a financial center,

New York will gain. If Airbus fails, Boeing will have a chance to recover. If the euro collapses, the dollar will strengthen even more. As Germany's Energiewende disintegrates, the demand for US LNG will increase. Whether supplies will be able to keep up is an open question, but that is Europe's problem, not America's. And if Europe now builds the long-proposed Qatar-Turkey pipeline through Syria, handing the keys to its security to Recep Tayyip Erdogan, president of the long-ago spurned applicant to the European Union – isn't it clear enough that Donald Trump will just chuckle? Brace yourselves. Trump’s tariffs show that he sees Europe, first and foremost, as a mark, to be drained for American profit. And – from his point of view, let’s face it -- he’s not wrong.

**
James K. Galbraith teaches at The University of Texas at Austin. His new book is Entropy Economics: The Living Basis of Value and Production, co-authored with Jing Chen, published by the University of Chicago Press.