One Year On: Assessing the Winners and Losers from Trump's Tariff Regime
The second administration of former President Donald Trump entered office with bold promises to ease household economic pressures and restore American economic strength through aggressive trade measures. Central to this agenda was the claim that sweeping tariffs would revive domestic manufacturing and rebalance international trade decisively in America's favour. Now, one year after the implementation of this controversial policy, the economic landscape reveals a complex picture of mixed outcomes and unintended consequences.
The Genesis of a Sweeping Trade Intervention
During the 2024 presidential campaign, Trump positioned tariffs as the cornerstone of his economic revival strategy. Upon returning to office, his administration quickly established trade policy as a central pillar of its agenda, moving beyond campaign rhetoric to concrete action. The administration announced its "America first" trade policy in January, prioritising reductions in the US trade deficit to revitalise domestic manufacturing while promising tougher economic relations with China.
The signature intervention came on April 2, when Trump announced what he termed "reciprocal tariffs" against various countries with which the United States maintained trade deficits. Framed as "Liberation Day" measures, these tariffs targeted Britain among other trading partners. However, their implementation was delayed until August, creating prolonged uncertainty for businesses and international partners alike.
Three Objectives, Mixed Results
The tariff regime pursued three primary objectives: raising government revenue, reducing the US trade deficit, and compelling changes in China's trade behaviour. The results after one year present a nuanced assessment of success and failure across these different fronts.
On revenue generation, the policy has delivered measurable results. Customs revenue increased sharply by US$287 billion (£213 billion), generating significant additional fiscal revenue outside the normal congressional appropriations process. In headline terms, the tariffs achieved their designed purpose of raising money, though analysis reveals that approximately 96% of this burden fell upon American buyers rather than foreign exporters.
Progress on trade balance improvement has been far less convincing. Despite a modest depreciation of the US dollar and stronger export growth during much of 2025, the total US trade balance for goods and services actually fell by US$69 billion. While the deficit on goods trade alone showed occasional narrowing, there is no substantive evidence that this represents a sustained trend toward meaningful rebalancing.
The China Conundrum and Supply Chain Realignment
Addressing the trade imbalance with China stood at the core of Trump's tariff strategy. According to trade data from the US Department of Commerce, during the first ten months of 2025, US imports from China declined by 27% – the largest bilateral decline observed among all US trading partners. Tariffs on Chinese products were imposed immediately without the transition periods granted to most other partners, aligning with the administration's stated objective of curbing Chinese market access.
However, this contraction requires important contextual understanding. US imports from China had already fallen by 19% between 2022 and 2024 amid rising geopolitical tensions and earlier trade restrictions. More significantly, China continues to post substantial global trade surpluses while successfully diversifying both its export destinations and product composition, thereby reducing its reliance on the American market.
Rather than weakening China's trade position, the tariff regime has accelerated global supply-chain reconfiguration. Trade is increasingly being trans-shipped through intermediary countries before arriving in the United States, while China has simultaneously increased trade with other nations to replace the reduction in US-China commerce.
Domestic Impacts and Manufacturing Reality
The uneven rollout of tariffs, coupled with limited available data through October 2025, complicates comprehensive assessment of domestic impacts. Evidence suggests that tariff costs have largely been passed through to wholesale and retail prices, contributing to higher consumer prices for everyday goods rather than easing inflationary pressures as originally promised.
Manufacturing output rose by a meagre 1% in 2025, representing a muted response given the scale of protection introduced. Industrial growth has also been constrained by labour shortages resulting from tighter immigration rules, demonstrating that strong trade protection alone cannot overcome broader structural challenges.
Global Consequences and Development Impacts
Some of the most significant unintended impacts have been felt beyond American borders. Analysis by London-based thinktank ODI Global highlights the extreme vulnerability of low- and middle-income countries caught in the crossfire, characterised by high export dependence, limited alternative trade partners, and constrained fiscal space.
Combined with cuts to international aid, higher US tariffs could reduce export earnings for many developing nations by up to US$89 billion annually – approximately 0.7% of GDP on average. In effect, the cost of American protectionism has been substantially pushed onto other economies.
Least developed countries face particular economic risks due to the tariff design, which was based on bilateral US trade deficits rather than partner countries' ability to adapt to policy changes. This approach penalised economies highly dependent on the US market, particularly those relying on labour-intensive manufacturing sectors like clothing and footwear for employment and foreign exchange.
Women constitute a large share of the workforce in these vulnerable sectors and have consequently been disproportionately affected by tariff measures. The economic shocks transmitted rapidly through reduced orders, factory closures, and unemployment, despite the absence of strategic intent to specifically target these economies.
Looking Ahead: Legal Challenges and Future Directions
This ambitious tariff experiment now rests in the hands of the US Supreme Court, with a ruling expected within days that could determine its future trajectory. Should the reciprocal tariffs be overturned, alternative options remain available to the administration, including a flat 10% tariff on most countries or measures under Section 122 of the 1974 Trade Act, though these would be limited to 15% for a maximum of 150 days.
Simultaneously, the administration has signalled potential new tariffs linked to geopolitical disputes, raising concerns about widening trade conflicts beyond economic considerations alone.
One year into this bold trade experiment, China's global trade position remains resilient while US trade balances show no sustained improvement. Instead, the costs of economic adjustment have been unevenly distributed across countries, sectors, and households. The tariffs may not have made America economically greater as promised, but they have certainly created measurable economic hardship for trading partners and vulnerable populations worldwide.
