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US President Donald Trump speaks from the Oval Office on April 18, 2026, before signing an executive order on research related to psychedelic drugs as treatments for mental illnesses. (Reuters/Yonhap)

A year after their rollout, many analysts say that US President Donald Trump’s tariff policies have been detrimental to America’s own economy. Specifically, experts have noted that the tariffs have merely increased the burden on local importers and consumers without yielding the kinds of manufacturing job creation effects that were promised.

In a report published last month, the US-based Brookings Institution observed that US importers were responsible for around 90% of last year’s tariff revenues, with “foreign exporters absorbing only about 10% of the cost by lowering their before-tariff prices.”

This means that for a given item priced at US$1,000 and subject to a 20% tariff (US$200), the import price reduction effect would amount to just US$20, with US importers and distributors covering the remaining US$180.

Tariff revenues for the US government last year amounted to US$264 billion, or more than triple the total a year earlier. But as US businesses and households have absorbed the costs of most of the increase in tariffs, it has mostly functioned to dampen domestic demand.

The effects of the tariffs on the US economy in terms of real income last year were estimated between a loss of 0.13% of GDP and a gain of 0.10%. 

In effect, as costs borne by importers and consumers have only been “redistributed” as profits for domestic manufacturers that have gained a competitive edge thanks to the government’s tax revenues and rising costs of imports, tariffs have had a negligible, if any, effect on increasing economic wealth in America as a whole. 

Earlier this year, the Cato Institute, yet another US think tank, noted that despite the Trump administration’s pledges to revitalize domestic manufacturing, declining job numbers for the sector suggested that “the administration’s own policies — particularly, its erratic use of tariffs — are a significant part of the problem.”

As of December 2025, the manufacturing sector employed close to 70,000 fewer workers than it had a year prior. 

In order to protect domestic industries, Trump imposed high tariffs on imported intermediate goods and capital equipment such as steel and aluminum, causing prices to surge. Rising prices, in turn, led to major job losses in sectors that rely on those resources, including those related to machinery, computers, and transportation equipment. 

Rising uncertainty caused by unpredictable tariff policies also hindered the economy by making it difficult for businesses to make long-term investment and hiring plans. 

While Trump talked a big game about imposing steep tariffs on major trading partners, numerous analyses have found that the effective tariff rate has remained lower than the statutory tariff rate, with the exception of those on China. 

The Brookings Institution found that in 2025, 57% of imports that entered the US did so duty-free, thanks to existing trade policies like the USMCA, a free trade agreement with Mexico and Canada. 

Other observers say that Trump’s tariff policies were both a means of rallying his base at home and an economic lever to exert pressure on allies like South Korea and Japan to invest in the US. Richard Baldwin, a professor at Switzerland’s IMD Business School, calls this “tariff theatre.”

“The policy looks erratic because it is not organized around standard economic goals such as efficiency, competitiveness or even a coherent mercantilism. It is organized around what I called the ‘Grievance Doctrine,’” Baldwin writes on Substack. “In short, Trumpian tariffs are all about generating ‘happy headlines’ that fulfil his campaign promise to restore American pride, stand up to global elites, and put America first.”

By Park Jong-o, staff reporter

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