Costs from Trump's tariffs paid mainly by US firms and consumers, NY Fed says
BBC News6 days
Trump's tariffs have backfired spectacularly, with American consumers bearing 90% of the costs while the economy underperforms his own first term. Manufacturing jobs actually declined in 2025 compared to growth in 2017, real wages grew slower, and domestic investment lagged significantly behind the tariff-free 2017 boom. The efficiency losses from these Depression-era tariff levels nearly equal the revenue raised, making them one of the costliest tax policies in modern history.
Tariffs have sparked an American economic miracle, slashing the trade deficit by 77% and the budget deficit by 27% while securing $18 trillion in foreign investment commitments. Manufacturing is booming with the ISM index jumping to 52.6 and factory construction up 42%, proving tariffs attract capital and jobs rather than repel them. The first new aluminum smelter since 1980 is being built in Oklahoma, demonstrating how strategic tariffs restore industrial capacity and national security.
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