I don’t believe that Trump uses the current tariffs as a negotiation leverage – at least not across the board.
The U.S. will not go back to 0% or < 10% tariffs, because Republicans (JD Vance) will with absolute certainty lose re-election.
Trump promised to revive the Rust Belt, which are the swing states. He can only “save” them through tariffs against China and all current and future China alternatives.
Some regions, and I’d include the EU, UK, Argentina, Australia, New Zealand here, now have the unique chance to negotiate towards free trade or at least a friendly ≤ 10% tariff.
Yet, speaking of the EU, I think they are mostly too arrogant or stupid to do so. 10% seems to be the new base anyhow.
The relevant question is how the EU will respond.
Currently, it looks that the EU is looking for sovereignty. This could mean new entry barriers for US technology products. Perhaps even a straight out ban of key technologies like Palantir to replicate local key players.
This in turn is the ultimate and biggest threat to the USA. A world that is shifting away from US technology will erode the vital pillar that is currently keeping the US dollar alive.
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