Despite promises that protectionist trade policies would usher in an era of unprecedented prosperity, recent economic indicators reveal a more sobering reality for the United States. Far from a booming economy, the Trump administration’s tariff regime appears to be grappling with stalled job growth, rising inflation, and a general slowdown, directly challenging the proclaimed benefits of its aggressive trade policy.
Experts like Georg Riekeles, a seasoned negotiator from the Brexit talks, observed early on how nations might counter such aggressive measures. When the U.S. imposed blanket tariffs on E.U. exports, Riekeles advocated for a robust retaliatory package. While the E.U. initially imposed duties on iconic American goods, their ultimate response was deemed a “capitulation,” resulting in a one-sided agreement where European goods still face significant levies while the E.U. commits to massive U.S. investments.
President Trump consistently claimed his tariffs would ignite an American “boom,” often citing stock market highs and dismissing “Fake News” and “Experts.” However, a series of comprehensive economic reports this week presented a stark contradiction. GDP growth significantly slowed in the first half of 2025 compared to the previous year, with combined figures showing a mere 1.3 percent expansion over six months, a considerable drop from 2.8 percent in 2024, indicating the emptiness of his assertions.
The economic impact of this uncertainty extends notably to the job market. The latest official employment report for July revealed a significant deceleration in job growth. Excluding seasonal farm labor, only seventy-three thousand new positions were created last month, below Wall Street expectations. More alarmingly, revised estimates for May and June showed job growth plummeting to below twenty thousand in each month, marking a virtual standstill and the weakest employment growth in any comparable period since early 2020.
Trump’s immediate reaction to the dire economic data was to lash out, a pattern characteristic of his Trump Economy approach. He renewed attacks on the Federal Reserve for not cutting interest rates and, in an unprecedented move, announced the firing of the commissioner of the Bureau of Labor Statistics, accusing the agency of rigging job figures to discredit him. Such actions, targeting career public servants dedicated to accurate data, underscore a desperate attempt to scapegoat rather than address underlying issues.
Furthermore, the data points to troubling inflation trends. Another recent report indicated that the rate of inflation, using the Fed’s preferred metric, edged up to 2.6 percent in June from 2.4 percent in May. With inflation still exceeding the Fed’s two-percent target, this suggests a concerning possibility of stagflation – a scenario where prices continue to rise even as the economy stagnates, exacerbating the challenges posed by his US Tariffs.
Economists, including Joseph Gagnon from the Peterson Institute for International Economics, dispute the core premise of Trump’s trade policy. Gagnon asserts that empirical data demonstrates no direct relationship between trade balances and tariffs, suggesting that a reduction in the trade deficit through these policies might only occur by pushing the economy into a full-blown recession. Such a scenario would reduce spending on all goods, including imports, rather than genuinely addressing trade imbalances.
The new protectionism regime is further complicated by its arbitrary nature, with levies ranging from ten to fifty percent across numerous nations, including impoverished countries like Chad and Laos. From Trump’s perspective, this complexity serves a purpose, enabling him to leverage tariffs as tools of political reward and punishment. Exemptions for goods vital to politically powerful U.S. industries, while others face steep duties, highlight the whimsical and self-serving application of these measures in global trade.
The Trump administration‘s approach, characterized by demands for “tribute transfers” and high tariff walls, draws historical parallels to extractive economic policies of the Ming dynasty rather than the open trade order championed by previous U.S. presidents. This strategy, combined with actions like dismissing economic scorekeepers, not only alienates traditional allies but also increasingly undermines the credibility and inherent strength of the U.S. economy, making the detrimental consequences of these policies undeniably apparent.
