Last fall, Donald Trump threatened to impose stiff new tariffs on Mexico, Canada, and China. Recently he added the European Union to the target list, unless its member nations “make up their tremendous deficit with the United States by the large scale purchase of our oil and gas.”

What, exactly, do all these impending tariffs portend?

Economists tend to evaluate 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.

With regard to Mexico and Canada, Trump’s political motives are fairly transparent. He wants to compel Mexican President Claudia Sheinbaum to seal the border, block migrants from heading north, and accept deportees from the United States—including many who will not be Mexicans. She may well agree to some version of this. As for Canada, one evident goal was to humiliate and destroy Prime Minister Justin Trudeau. That mission is now moot, but the threat of tariffs will hang over Trudeau’s successors—rubbing Canadian noses in Trump’s point that Canada is no longer an independent country, in any important sense of the word.

And if the tariffs on Mexico and Canada apply to hydrocarbons—a major import from both countries—that will spur drilling in the Permian Basin of the southwestern United States, boosting prices and profits and thus helping to fulfill the third part of Trump Treasury secretary pick Scott Bessent’s “3-3-3” plan by increasing domestic energy production. (The other parts are faster GDP growth and reduced budget deficits, both of which could conceivably also be aided by energy tariffs.)

In the case of China, however, new tariffs can’t do very much. China has a vast economy, and its exports are competitive throughout the world; the days when it was dependent on the US market are past. President Xi Jinping could, if he chose to, offset new tariffs by devaluing the renminbi, but he will (probably) not let currency devaluation go too far, to avoid triggering a destabilizing rise in speculative capital movements and higher prices for imported food and fuel. More likely, China will shift—even further—toward non-US markets, and the United States will increase its imports from Vietnam, Bangladesh, Thailand, Indonesia, the Philippines, and other Asian nations. US consumers will lose out mainly by being deprived of Chinese products they’ve never seen, such as BYD electric cars (which are already selling in Mexico for about $21,000) and Huawei phones. On more consequential matters, like the competition over 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.

Yet tariffs against China will surely be raised—not because they will be successful, but because US politics will demand it. Washington’s 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”—a propaganda win for America and an economic win for China.

The linchpin of Trump’s tariff policy, however, is not Mexico, Canada, or China, but Europe. A tariff wall, combined with the United States’ cheap and reliable domestic energy, lower interest rates, low union density, steady economic growth, and a strong research and development base, will draw Europe’s industrial corporations—especially those based in Germany—to build new factories here, even as they shrink their operations in their now-unprofitable homelands. Gradually, their own supply chains will also shift—especially for Italian producers tied to Germany—to North America. This process is already underway; the Trump-Bessent policies, taken as a whole, seem tailor-made to speed up the process.

What will happen next for Europe 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 probably already knows that sanctions have failed. He may realize soon enough that Moscow is undeterred by threats and bluffs. Given the enormous stockpile of nuclear weapons on both sides, it would be suicidal for the United States to resort to the nuclear option—and one can only hope that Trump also understands this.

It follows then that given the imbalance of resources and territory between Russia and Ukraine, the war in Ukraine will end, sooner or later, in a victory for Russia regardless of what Trump does. Will Vladimir Putin then go on to threaten, or attack, any NATO country? Short answer: Definitely not. Trump and his team may grasp that Russia’s interests stop at NATO’s borders—indeed, that Russia’s interest in Europe is by now no greater than our own.