The overall economic effect of President Trump's 2025 tariffs remains unclear

Researchers from UCLA and Yale found that tariff revenue and gains to US producers largely offset importers' costs—but the broader picture is murkier, as the trade deficit rose, manufacturing jobs declined, and 90% of tariff costs were passed through to importers rather than absorbed by foreign exporters.

In President Trump's first year of his second term, inflation fell from 3% year-over-year in January 2025 to 2.7% in December

While the price of eggs and bread went down over Trump's first year in office during his second term, coffee and beef prices rose. Utility bills and home insurance continued to surge, but mortgage rates, rent, and home prices began to stabilize in 2025.

See a chart showing how US tariff revenue has grown in recent years.

Auto and consumer goods companies absorbed billions in costs due to President Trump's 2025 tariffs.

Track how American tariffs have impacted different countries and industries.

Trump's 2025 tariffs represent a significant break from the rules-based trade order

The Trump administration imposed broad tariffs on other countries outside WTO rules in 2025, claiming that those countries had long violated trade agreements and that the US was simply leveling the playing field.

Policymakers make complex trade-offs when considering tariffs—while they can generate government revenue and encourage the consumption of locally produced goods, they can also lead to higher consumer prices and may negatively impact economic growth.

Prices can still feel high even if inflation is slowing

This is partly because a recent spike in inflation raised prices permanently, so even though the pace of price growth has slowed, prices have still gone up for good.

US inflation can generally be split into to two periods—before and after the Federal Reserve

A central bank itself does not mean significant inflation will occur, but economists generally point to factors like two world wars and the printing of money to finance the US federal deficit as primary drivers of price increases.

Tariffs once fueled the US economy, historically serving as a primary source of revenue and a means to protect domestic industries.

An economic evaluation of US tariffs

Most economists agree that the implementation of large-scale tariffs on foreign goods would hurt both the American and global economies. This video from The Wall Street Journal explains the rationale for tariffs as a tool for domestic job creation, but explains why they may hurt the overall economy.

The highest inflation ever recorded in US history was estimated at 30% in 1778, just after the Revolutionary War.

The Federal Reserve targets 2% inflation

It’s an arbitrary number originating from an offhand comment made by a New Zealand policymaker. The real objective is to maintain predictable prices for businesses and families to plan around while avoiding the dangers of deflation.

Read an overview of US tariff policy before the second Trump Administration

This comprehensive report from the Congressional Research Service explores the evolving role of tariffs—from a major source of government revenue to a tool for trade and foreign policy—providing insights into current practices, legal foundations, and global trade dynamics.

The Supreme Court ruled in February 2026 that Trump's emergency tariff powers didn't extend to imposing tariffs

In a 6-3 decision, the court held that the International Emergency Economic Powers Act—a 1977 law granting the president authority to regulate commerce during national emergencies—does not authorise the president to unilaterally impose tariffs, a power the Constitution reserves to Congress.

Tariffs are taxes levied on goods imported from abroad.

Despite the Supreme Court ruling that President Donald Trump's 2025 tariffs were unconstitutional, billions of dollars in refunds remain unresolved

Over 2,000 lawsuits seeking refunds have been filed by major companies, including FedEx and Costco, but CBP says its systems can't handle the volume. Interest on unpaid refunds is accruing at an estimated $650M per month.

China had an inflation rate of -0.4% in August 2025

As opposed to other G20 countries that are largely struggling with high inflation rates, China is facing deflation. Sluggish growth in the country's once booming real estate market is just one glimpse into the consumer slowdown triggering deflation.

President Trump ordered an end to US production of the penny in 2025

The US will stop producing pennies after more than 233 years in 2026, though they will still be considered legal tender. It takes roughly three cents to produce a single penny, with an annual price tag of nearly $100M.

Inflation is a monetary phenomenon in which consumers see a broad rise in the prices of goods and services across the economy over time

Sustained periods of inflation are often caused by central bank policies including low interest rates or increased money supply. With more money chasing the same number of goods and services, prices tend to rise and the value of a single dollar drops.

A trade war is an economic conflict where nations impose tariffs or other trade barriers on each other in retaliation for similar actions.

'Planet Money' debates the financial indicators that defined 2025

In this end-of-year episode, "Planet Money" stages a playful debate over which economic indicators best captured the chaos of 2025—from tariffs to AI bubbles—and which signals may matter most as the US economy heads into 2026.

Disinflation, a decrease in the rate of inflation, is different from deflation

Disinflation happens when prices are still going up, just at a slower rate. Prolonged disinflation is also often accompanied by a recession, making it painful for consumers.

The Smoot-Hawley Tariff Act—which was passed during the Great Depression with the goal of reviving domestic industry—is among the most famous pieces of economic legislation in US history.

Behind the scenes on tariff politics

Economist Gene Grossman joined the Trade Talks Podcast to discuss why tariffs really happen. The episode digs into how voters, politicians, lobbyists, and even campaign cash can affect when protectionist trade policies are put forward. Produced in 2019, the podcast also discusses how populist trade policies and identity politics accounted for Donald Trump’s victory in the 2016 Presidential election.

COVID-19's shock to employment rates sparked some economists to fear deflation

COVID-19 simultaneously disrupted the supply chain and the labor market. Since the unemployment rate had hit record highs, some economists were worried that the supply chain would recover before the labor market. If that had happened, businesses would have been producing goods, but no one would have been able to buy them because they wouldn't have the disposable income to do so.

Wedding cost increases have outpaced inflation

The cost of the average US wedding rose by 13.79% between 2023 and 2024, whereas the inflation rate during the same time period was roughly 2.9%.

Is Domino’s pizza inflation-proof?

A Big Mac Extra Value Meal is nearly $11 in 2025, compared to $4.59 in 1993. A Taco Bell crunchy taco costs $1.79 today, but was only 59 cents in 1990. Inflation impacts the price of many fast-food items—but the price of a Domino's pizza hasn't changed much at all in the past two decades.

Tariffs are typically paid by the importing company or organization to the US Treasury.

Mapping projected food inflation across the world in 2026

Iran tops the list of hardest-hit countries with a projected 56% inflation on food prices in 2026, followed by Argentina (33%) and Turkey (25%). In the opposite direction is Niger, whose food inflation is expected to drop 18% as a result of strong harvests and financial stabilization. The global average of food inflation is expected to be 3%.

Listen to a podcast episode that outlines 250 years of world trade history.

Switzerland's currency is so strong that it could cause deflation

Economic instability in the United States in 2025 strongly benefited Switzerland, where the value of the franc relative to the dollar increased by about 12.7%. In response, the price of imports dramatically decreased, making goods overall much cheaper.

The US dollar has served as the world's reserve currency for 80 years—but is its dominance coming to an end?

Since the establishment of the Bretton Woods economic system, about 90% of global foreign exchange transactions have involved USD. Although no viable alternative exists yet, the dollar's share of central bank reserves has decreased from 73% to 58% from 2001 to 2024, and President Trump's 2025 tariffs have sped up this trend.

See how the S&P 500 performed throughout the first 100 days of each modern presidency.

A majority of Americans think President Trump is using more power than previous presidents

An October 2025 Pew Research Center survey found that 69% of Americans believed President Trump was trying to exert more power than previous presidents. Most Democrats viewed it negatively, while about half of Republicans said it was good for the country.

The General Agreement on Tariffs and Trade and its successor, the WTO, was formed to reduce trade barriers between nations.