During President Donald Trump’s campaign, he pledged to impose a new universal baseline tariff of 10% on all imports to the United States, and even higher tariffs on Canada, Mexico, China, and several other countries. On April 2, 2025, he announced his “Liberation Day” tariffs. Where does the economy stand after one year?
- Who's paying for the tariffs?
- Which goods have tariffs made more expensive?
- Has Trump's tariff strategy benefitted Americans?
- How has the national debt changed under Trump?
- How has media bias distorted these issues?
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Who’s paying for the tariffs?
According to the University of Pennsylvania’s Penn Wharton Budget Model, overall effective tariff rates increased from 2.2% in January of 2025 to 9.75% in July, and peaked around 13% by year-end.
Some of the key tariffs included 10%-41% reciprocal tariffs, a 33.4% tariff on China, and tariffs on steel/aluminum at over 39%. However, the United States-Mexico-Canada Agreement (USMCA) partners avoided many of these hikes through claimed exemptions, keeping their effective rates below 5%.
Tariff burdens typically fall on three primary sectors: foreign manufacturers, domestic importers, and consumers. In this case, there’s little evidence suggesting that international exporters are bearing much of the added cost caused by tariffs.
Most are focused on how US consumers and businesses are being impacted.
An article by Liberty Street Economics, an offshoot of the Federal Reserve Bank of New York, found that “nearly 90 percent of the tariffs’ economic burden fell on U.S. firms and consumers.”
Fortune (Center) covered the Liberty Street Economics findings, saying that “despite President Donald Trump insisting it’s foreign businesses paying for his raft of tariffs, mounting data indicates that, actually, American households and businesses are footing the bill.”
Others like the Council on Foreign Relations (Left) and Germany’s Kiel Institute (Not Rated) echo some of the same findings.
On the other side, Breitbart (Right) called the findings that Americans are paying over 90% of tariffs “a myth.”
Citing the Kiel Institute study, Breitbart said the “claims to have settled the tariff debate with unambiguous evidence” are problematic because “the study doesn’t actually prove what it claims” and provides “zero empirical analysis of retail prices, corporate profit margins, or pass-through along the supply chain.”
The Liberty Street analysis seems to be the most pessimistic. A 2025 paper from the National Bureau of Economic Research says about 20% of Trump's tariffs reached US consumers.
Which goods have tariffs made more expensive?
The Yale Budget Lab calculated that…
...clothing prices rose by about 17% across all the tariff actions since April 2025, making apparel one of the most affected categories of goods.
Food and groceries, on the other hand, only rose about 2.8% from tariffs, with fresh produce and imported items like dairy and alcoholic beverages being hit the hardest.
Yale also found that motor vehicles and parts increased about 8.4% overall, and electrical equipment prices increased about 10% overall. The Federal Reserve found that goods imported from China saw the highest price increases, at about 8% higher at the end of 2025 than the beginning.
The Bureau of Labor Statistics showed that consumer prices in June of 2025 were 2.7% higher than the year before. Furniture and appliances were some of the goods that had the biggest price increases.
Has Trump's tariff strategy benefitted Americans?
YES, tariffs are rebuilding American industry and restoring leverage.
- Trump's tariffs are achieving exactly what was promised: restoring trade balances and responding to industrial hollowing-out. The steel industry is booming as the US became the third largest steel-producing nation in the world in 2025. Furthermore, tariff receipts reached $264 billion in 2025, more than triple 2024 levels - a significant new source of federal income.
- Contrary to many economists' forecasts, the US avoided recession in 2025. GDP continued to grow, and the most extreme tariff rates (like the April 2 "Liberation Day" reciprocal rates) were scaled back before they could cause extreme damage.
NO, Americans are paying the bill, and the promised gains haven't arrived.
- The tariff costs are falling almost entirely on American households and businesses, not on foreign exporters as the administration claimed. Studies from the Federal Reserve Bank of New York found that between 94% and 96% of tariff costs were absorbed by US importers and consumers in 2025. The Tax Foundation estimates that Trump's tariffs amounted to an average tax increase of $1,000 per U.S. household in 2025 alone.
- Despite the tariffs, manufacturing employment declined slightly in 2025 and the overall goods trade deficit rose modestly rather than falling. Furthermore, US crop exports dropped as China and other partners imposed countermeasures, leading to farm bankruptcies that required government bailouts to partially offset.
MAYBE, the aggregate impact is smaller than feared, but the full story isn't written yet.
- Evidence suggests neither a major success nor a failure so far. Economists from UCLA and Yale found the aggregate net economic impact of the 2025 tariffs to be small, because tariff revenues and gains to domestic producers partially offset what importers and consumers paid.
- US-China trade decoupling was successful, tariff revenue tripled, pharmaceutical and steel investment commitments are real, even amidst the uncertainty of their long-term payoffs.The tariffs did generate negotiating leverage, producing a series of bilateral framework agreements with trading partners by mid-2025, including a significant deal with China in October that secured farm purchases and rare earth access in exchange for tariff reductions.
How has the national debt changed under Trump?
Trump suggested during his 2016 presidential campaign that he could get rid of the nation’s then-$19 trillion debt in eight years. However, the expenditures of his other agenda items, such as a $500 billion defense spending increase and a $4.5 billion “Smart Wall” along the southern border, have conflicted with that goal.
US national debt surpassed $39 trillion in March, rising one trillion in just five months amid the ongoing Iran War. It is projected to reach $40 trillion before the midterm elections in November.
The debt is reportedly growing at about $4.60 billion per day, or $53,241 per second. Debt per taxpayer is estimated to be about $188,000 higher than in 2016, when Trump secured his first presidential nomination.
Source: US Debt Tracker
The US Treasury Department states, “Comparing a country’s debt to its gross domestic product (GDP) reveals the country’s ability to pay down its debt. This ratio is considered a better indicator of a country’s fiscal situation than just the national debt number because it shows the burden of debt relative to the country’s total economic output and therefore its ability to repay it… Generally, a higher Debt to GDP ratio indicates a government will have greater difficulty in repaying its debt.”
Trump’s first term saw a steady rise in debt to GDP ratio, with the exception of a 1% decrease in 2017. The ratio increased 1% to 124% during the first year of his second (nonconsecutive) term.
The ratio saw a decline of 5% under former President Joe Biden after a record spike to 126% in fiscal year 2020. It then rose to 123% in 2024 – the last complete fiscal year of his presidency.
Source: US Treasury
The Department also notes that while intragovernmental debt has increased by 43% since 2016, debt held by the public has increased by 126%.
If you read Fox Business (Lean Right), you might think the tariffs have positively benefitted US businesses and commerce.
“Trump’s tariffs power steel revival,” reads one headline. “Mercedes-Benz to pour $4B into Alabama plant as Trump tariffs reshape US auto strategy,” reads another.
This positive framing is visible across Trump’s base. A survey of CPAC attendees this week suggested that 91% of respondents said they supported Trump's tariffs.
If you read the New York Times (Lean Left), you’ll get a much different impression, one of “confusion and uncertainty.”
“Companies that import products containing steel and aluminum — which range from washing machines to golf clubs — have complained that the way the administration imposed tariffs on those products was burdensome and confusing,” according to the Times.
The Times has also constantly highlighted the ongoing legal challenges to Trump’s tariffs – something you won’t see on Fox Business. Conversely, you don’t see much support for the tariff strategy if you only read the Times.
There are many angles to tariffs: how they impact consumers, domestic businesses, and foreign industries. To understand it all, you must consume information from beyond your bubble.
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How has media bias distorted these issues?
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