Introduction

There’s been a palpable shift in the political landscape and economic policies under the 47th U.S. President, Donald J. Trump, who took office on January 20, 2025, with J.D. Vance serving as Vice President. This leadership has brought significant changes, some of which have proven controversial. In this post, we’ll delve into the U.S. economy’s health, dissect Trump’s tariff and trade policies, and examine how international developments are playing out. Buckle up, it’s quite a ride.

Economic Performance

At first glance, the U.S. economy seems to be in a mixed health state. Although there’s been GDP growth of approximately 2.4% in Q2 2025 contrasting the slight contraction witnessed in Q1, the unemployment rate remains low at around 4.1%. With core CPI inflation lurking between 2.7% and 2.9%, economic analysts from organisations like OECD project a lukewarm outlook, with growth projected at 1.6%–1.7% and inflation reaching 3.9% by year-end. These figures tell a story of a recovering economy navigating complexities.

Tariffs & Trade Policies: Changing Tides

Trump’s trade policy – characterized by aggressive tariffs on goods from China, EU, Canada, and Mexico – has left a significant impact on global trade. Baseline tariffs have been set around 15-50% by the August 1 deadline. However, these policies, while bold, haven’t been without challenges both domestically and internationally.

Let’s briefly touch on some key trade relations. Negotiations at the Turnberry golf resort with the EU aim at establishing a 15% baseline tariff. On the other hand, the U.S.-Japan trade deal has reduced import duties to roughly 15%, a move that saw the markets rally, with the deal valued at around $550 billion investments. U.S.-China negotiations are also underway in Stockholm to extend a tariff truce.

But it’s not all smooth sailing. A trade war with Canada and Mexico, initiated through a 25% tariff on imports from both countries effective March 4, triggered retaliatory measures. These conflicts have caught the attention of the Court of International Trade, which ruled in May 2025 that tariffs imposed under the IEEPA exceeded presidential authority.

The International Outlook: Ripple Effects

The OECD has warned of a global slowdown exacerbated by U.S. trends, resulting in trimmed growth, rising inflation and a slower global forecast. Trade uncertainties have also sent shivers through the business community in varied places such as the UK. Looking forward, negotiations with countries like the UK and Pakistan are forging ahead, while pushbacks are emerging in Europe, with boycott movements targeting U.S. goods and travel warnings issued over U.S. border policies.

Looking Ahead: The Economic Jigsaw

There’s no question that the current administration’s policies and decisions are significantly influencing the U.S. economic landscape and international relations. Amidst all the rapid changes, it is essential to remember that economics, like a jigsaw, must have all pieces fitting together to reveal a clear, more considerable picture.

Regardless of individual opinions on the administration’s course, staying informed and understanding the context is of significant importance for businesses, investors, and citizens alike considering the domino effect that these policies can have far from the U.S. borders. We will continue to keep you updated as more unfolds in this continuously evolving landscape.

References:
OECD economic outlook, Court ruling on IEEPA tariffs, US Treasury milestones, International boycott measures sheltered under USMCA.