Trump’s Tariff Doctrine: The Rise of a Transactional Trade Order

Power grows out of the barrel of a trade agreement

By: Khanh Vu Duc

US President Donald Trump has rewritten the global trade script again. From Tokyo to Brussels, from Seoul to Manila, the US has rolled out a series of hardline yet surprisingly pragmatic trade deals that are reshaping the international economic order. The pattern is unmistakable: tariff threats first, followed by transactional deals anchored in strategic alignment, market concessions, and de facto containment of China.

The latest in this wave is Trump’s agreement with South Korea, unveiled on July 30. It follows earlier agreements with Japan, the European Union, the Philippines, Indonesia, and Vietnam. Each deal is slightly different in structure but shares common elements that define what may now be called the Trump Tariff Doctrine.

The Doctrine in Action

At the heart of Trump’s trade revolution is a tiered tariff structure: 15 percent for close allies (G7 members, South Korea and Australia possibly), 15–20 percent for strategic partners like Vietnam, the Philippines, and Indonesia, and harsher penalties – up to 50 percent – for countries deemed non-cooperative or economically adversarial (Brazil). The United States will impose a 25 percent tariff on goods from India, plus an additional import tax because of India’s purchasing of Russian oil, Trump said. Only the UK, thanks to a separate and earlier deal, managed to secure a 10 percent tariff ceiling.

In exchange for these lower tariffs, partners are expected to concede three core components:

• Zero-tariff access for American companies in all sectors, or at least in certain key sectors, including digital services, pharmaceuticals, aerospace, energy, and financial services.

• Strict rules of origin and transshipment, especially to block Chinese rerouting of exports through third-party nations.

• Strategic alignment with U.S. Indo-Pacific or Atlantic security objectives, tying economic benefits to broader geopolitical cooperation.

• In essence, this is not merely trade policy –it is a strategy cloaked in tariffs.

The Vietnam–Japan Template

Vietnam was the first country in the Indo-Pacific to accept this model, striking a deal on July 2 that granted zero percent tariff for US products while agreeing to a 20 percent tariff on Vietnamese exports to the US, with any transshipments from third countries through Vietnam to face a 40 percent levy. In return, Vietnam was exempted from a planned 46 percent tariff and gained preferential access to American markets, alongside a high-level political endorsement from the White House. Tokyo soon followed, locking in a historic US$550 billion investment and trade agreement that resembled a modernized version of the post-war Marshall Plan.

The Japan deal is especially noteworthy. Beyond trade, it commits both countries to co-develop advanced semiconductors, collaborate on energy security, and enhance Indo-Pacific maritime defense. By tying economic access to joint technological and strategic initiatives, Trump has elevated bilateral trade into a foundation for a long-term security alliance. The Japan model has effectively become a template for what a 21st-century “Pax Americana” could look like, based not on multilateral institutions but on bilateral enforcement and transactional mutual gain.

Canada, now led by Prime Minister Mark Carney, faces an imminent 35 percent tariff threat from the White House. Ottawa has not yet secured a deal and risks becoming an outlier within the G7. This would be a profound mistake. Canada must now recognize the shape of the new world order: bilateralism reigns, multilateral frameworks are in retreat, and strategic agility is key.

The Carney government should have taken a page from the Vietnam–Japan playbook and quickly negotiate a deal that aligns Canada with US expectations. Now Trump has escalated the trade war by boosting the tariff rate from 25 percent to 35 percent, accusing Canada of having "failed to cooperate" in curbing the flow of fentanyl and other drugs across the US border although little fentanyl is known to pass the northern border and the Canadians say they are cracking down on drug gangs.

This is not about capitulation. It is about navigating a geopolitical storm with foresight. Canada’s membership in the G7 and deep integration with US supply chains make it a natural fit for the 15 percent tariff tier. The political cost of resisting Trump’s model is simply too high.

Toward a Transactional International Order

What we are witnessing is the birth of a Transactional Order, a system where access to the US economy is conditional upon political alignment and economic reciprocity. Trump’s deals signal an end to the postwar liberal order anchored by the World Trade Organization, and a transition to an American-centric hub-and-spoke system where power, not principle, dictates terms.

This order is not without logic. It rewards loyalty, punishes opportunism, and leverages America’s economic gravity to enforce strategic discipline. For countries like Vietnam, Indonesia, the Philippines, and even parts of the EU, it offers a path to security and prosperity, provided they accept American rules of engagement.

The clearest winners in this new structure are the early signers: Japan, South Korea, Vietnam, and the EU. They have secured a degree of stability and influence in shaping the new order. The losers are those who delay or defy—Canada, Mexico, India, and states in Latin America that may soon face similar choices.

And China? These deals are designed fundamentally to isolate and contain Beijing economically. By closing off indirect access via transshipment, tightening technological cooperation among allies, and creating a de facto economic bloc, Trump is executing a slow but deliberate decoupling – without needing a single international conference to bless it.

Strategic Inflection Point

For critics of Trump’s style and substance, this order may appear chaotic and heavy-handed. But it reflects a deeper strategic rationality. The United States is seeking to reorganize the global trade architecture to serve its national interests first—but in doing so, it also forces allies to clarify their own positions.

The lesson is clear: the post-1945 consensus is over. The choice now is not between free trade or protectionism, but between alignment or exclusion. The storm is here. The smart move is not to resist it—but to steer through it with eyes wide open. And time is of the essence.

Khanh Vu Duc is an Ottawa-based lawyer and essayist specializing in international relations and international law. He is a frequent contributor to Asia Sentinel.