For all the talk about Donald Trump bluffing on tariffs, there are some very powerful economic and geostrategic reasons why he is likely to be dead serious. This has not been a fashionable perspective – for months most folks have argued that Trump will use the threat of tariffs as a commercial negotiating tactic, dismissing fears of the potentially dire consequences of a trade war.

The first problem Trump faces is the truly colossal cost of his tax cuts, which US think tanks estimate to be around $US8 trillion ($12.6 trillion) over 10 years. In the absence of massive new sources of revenue, the extra US government debt issuance required to pay for the tax relief could easily trigger a fiscal crisis in the form of radically higher interest repayments.