“You should think of tariffs three ways,” Bessent said. “One will be for remedying unfair trade practices either in an industry or by a country, like steel and China. Another will be as a revenue source, and third is to use it for negotiations with countries like Mexico for the fentanyl crisis.”

Other tariffs are waiting in the wings to address the other two goals: revenue and trade-balancing. Those have different purposes. For example, a universal tariff of around 10 percent would lower the budget deficit and provide hundreds of billions of dollars in new revenue. This revenue could then be used to extend the Tax Cuts and Jobs Act, which expires next year.

Trade-balancing tariffs exist to lower the goods deficit and protect industries that are perennial victims of dumping and overproduction from Asia. In 2017, the goods deficit with Canada was $16.2 billion. It ended 2024 closer to $60 billion. Final figures are due out on Wednesday. The goods deficit with Mexico was $69 billion in 2017. It will break a record in 2024 of around $162 billion.

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