US President Donald Trump has, at several occasions, claimed that broad tariffs on different countries has revived the American economy. In his recent opinion piece in The Wall Street Journal, Trump claimed that tariffs have created an “American economic miracle.”He also lamented on critics and economists who predicted that tariffs would backfire, raising prices and threatening growth. “When I imposed historic tariffs on nearly all foreign countries last April, the critics said my policies would cause a global economic meltdown,” US president wrote.”Instead, they have created an American economic miracle, and we are quickly building the greatest economy in the history of the world, with other countries doing just fine!” he added.However, it appears the US president is playing fast and loose with his claims, which are often not supported by facts.Here is what Trump claimed and how far were they from facts”Just over one year ago, we were a ‘DEAD’ country. Now, we are the ‘HOTTEST” country anywhere in the world!”
- US was not dead when he returned to the Oval office for his second stint for POTUS. Despite a shaky start of his second term, the economy has performed strongly overall.
- In 2024, the last year of the Biden presidency, American gross domestic product grew 2.8%, adjusted for inflation, faster than any wealthy country in the world except Spain. It also expanded at a healthy rate from 2021 through 2023.
- Meanwhile, first three quarters show that Trump’s tariffs – or even the threat of them – produced mixed outcomes. However, Full-year data for 2025 is not yet available.
- From January to March, US GDP contracted for the first time in three years. The reason was clear: imports surged as American companies rushed to stock up on foreign goods ahead of potential tariff hikes. Since imports are subtracted from GDP, the spike dragged growth into negative territory.
- The slowdown proved temporary. Growth rebounded sharply in the second quarter, with the economy expanding at an annualised rate of 3.8% from April to June. Momentum strengthened further in the third quarter, when growth accelerated to 4.4%. The rebound was driven in part by a decline in imports, reflecting both the impact of tariffs and earlier stockpiling. Strong consumer spending also played a major role.
- Trump has also pointed to gains in the US stock market, noting that stocks hit record highs 52 times in 2025. While the market did post solid gains, its performance lagged several global peers.
“Annual core inflation for the past three months has dropped to just 1.4% – far lower than almost anyone, other than me, had predicted.”
- According to news agency AP, Trump is using cherry-picked data to vastly exaggerate where inflation stands. Trump’s preferred inflation figure – annual inflation over the past three months excluding food and energy – is low. But it is also distorted. A government shutdown in October and November disrupted data collection, forcing the statistical agency to rely on rough estimates in some categories, which artificially pushed overall inflation lower.
- Core inflation over the final six months of 2025 stood at 2.6%. That is lower than January 2025 levels but roughly in line with October 2024. Overall inflation has largely plateaued this year. It was running at 3% in September, before the shutdown – the same level as in January 2025.
- It is true that inflation did not spike as sharply as many economists feared when Trump began rolling out tariffs last spring. But that is partly because many of the so-called “Liberation Day” tariffs were later withdrawn, scaled back or riddled with exemptions.
- The impact of tariffs is clearer in core goods prices, which also exclude food and energy. Before the pandemic, core goods prices typically rose little or even fell year after year. By last December, however, they were 1.4% higher than a year earlier – the biggest increase outside the pandemic since 2011.
“The data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen… paying at least 80% of tariff costs.”
- The study Trump cited appears to show the opposite. Co-authored by Cavallo, it finds that US consumers bore about 43% of the tariff-related costs after seven months, with most of the remainder absorbed by US firms.
- Cavallo said import prices barely declined, suggesting foreign exporters did not cut prices enough to shoulder most of the burden.
“We have slashed our monthly trade deficit by an astonishing 77%.”
- This figure also relies on cherry-picking – comparing an unusually large deficit in January 2025, when Trump took office, with an unusually small one in October. The broader trend is less flattering.
- From January through November 2025, the US ran a trade deficit of nearly $840 billion, about 4% higher than during the same period in 2024.
- Imports surged in the first three months of the year as companies rushed to buy foreign goods ahead of tariffs.
- While monthly deficits fell later in the year, the early import spike was so large that the year-to-date deficit still exceeds last year’s.
“I have successfully used tariffs to secure colossal investments in America… more than $18 trillion.”
- Trump did use tariff threats to extract investment pledges from trading partners. The European Union alone promised $600 billion over four years.
- But the administration has not explained how it arrived at the $18 trillion figure.
- The White House has cited $9.6 trillion in public and private commitments. Researchers at the Peterson Institute for International Economics estimate the pledges at about $5 trillion from the EU, Japan, South Korea, Taiwan, Switzerland, Liechtenstein and Gulf states including Saudi Arabia, Qatar, Bahrain and the UAE.
- They also caution that many pledges are vague and may never fully materialise, in part because some countries would struggle to finance them.
- The numbers are large by any measure. Total private investment in the US currently runs at about $5.4 trillion annually. In 2024, foreign direct investment – money put into factories, offices and other physical assets – totaled just $151 billion.