Experts on Trump's tariffs after one year

Last April, President Donald Trump unleashed a broad wave of tariffs on “liberation day” after declaring the policy on 2 April 2025. Analysts say the measure has failed to deliver the outcomes promised by the administration, including shrinking the trade deficit and revitalising manufacturing.

From policy shock to market reassessment

In the months leading up to liberation day, Trump’s administration moved quickly to reshape federal institutions, including wholesale slashing of government jobs under a “department of government efficiency” and defunding US aid agencies. Investors interpreted the resulting political and policy volatility as a feature rather than a bug, and the value of the dollar declined steadily against other currencies after Trump took office.

“If you think that discouraging investors from buying assets in the US is a victory, then you don’t believe in a growing economy,” said Dario Perkins, head of global research at TS Lombard. Russ Mould, investment director at AJ Bell, said investors continued to reassess their exposure “one year on from liberation day,” despite the US remaining home to the world’s largest economy and reserve currency.

Employment and confidence weaken

Economic performance has varied by measure, but US labour market data points to a slowdown soon after the tariff announcement. Bureau of Labor Statistics data shows that US companies—expected to benefit from the tariff war—stopped hiring almost as soon as liberation day was announced.

Revisions released in February reduced 2025 payroll employment by 403,000 jobs, while the addition of 181,000 jobs last year was described as a small boost against a total of 163 million people employed in the US.

Consumer confidence also weakened after Trump took office. Figures from the Conference Board show confidence sliding, with a brief recovery that coincided with a major de-escalation on 12 May, the day the US and China agreed to defuse post-liberation day tariff escalation.

After a period of rising sentiment, confidence fell again in the autumn as the White House battled Congress over the federal budget deficit and much of the public sector was shut down. A University of Michigan poll put consumer confidence at a near record low at the end of 2025, while a six-month moving average from the Conference Board showed every generation, from baby boomers to Gen X, had lost confidence in the economy over the past year.

Manufacturing job losses and trade deficit expansion

Trump’s liberation day executive order warned that “the decline of US manufacturing capacity threatens the US economy in other ways, including through the loss of manufacturing jobs.” Critics argue the data has supported that concern.

Between January 2025 and March 2026, the US manufacturing sector shed 100,000 jobs. The ratio of manufacturing workers to total nonfarm employment fell to the lowest point since 1939, when the Bureau of Labor Statistics began tracking the series.

In addition, the Bureau of Economic Analysis reported that the US deficit in goods expanded to an all-time high in 2025.

Criticism: tariffs did not meet stated goals

Bryan Riley, director of the National Taxpayers Union Foundation’s free trade initiative, said: “One year after liberation day, the evidence is in. Tariffs failed even by the Trump administration’s own terms. They did not shrink the trade deficit, did not revitalise manufacturing and did not help farmers. It would be a mistake to replace one set of failed tariffs with another.”

Broader policy risks and investor concerns

Critics also frame the tariff strategy as part of a wider pattern of economic hollowing-out to fund a populist agenda. Mould questioned whether the US would again be seen as a “capitalist haven” with robust courts and presidents protecting private assets, citing tariffs and “strong-arm trade tactics,” concerns about the independence of the Federal Reserve, and military incursions in Latin America and the Middle East, alongside sabre-rattling over Greenland.

He said these factors, combined with lofty US stock market valuations and a soaring federal deficit, are prompting investors to reassess “the narrative of American exceptionalism.”

IMF assessment: resilience, but heightened uncertainty

The International Monetary Fund said the US economy had proved resilient over the past year, but warned that there was “plenty to worry about.” The IMF’s directors said they were concerned about “the heightened domestic and global uncertainties posed by the significant ongoing policy shifts and the war in the Middle East”.

They added that, against this background, the US needs “determined actions” to reduce government spending deficits, protect institutions such as the Fed from political interference, keep inflation in check, and prevent financial markets from becoming destabilised.

Where investment is going

Some major US companies have redirected investments to Europe, but China has been identified as a key beneficiary. In the year to February 2026, China’s industrial profits increased by 15.2%. The article notes that Beijing may struggle to repeat the performance if Chinese companies face fuel and energy shortages and price increases.

Overall, it argues that the decline of two major powers can translate into gains for China.