The current U.S. administration, with Donald J. Trump sworn in as the 47th President on January 20, 2025 and J.D. Vance serving as Vice President, has brought considerable shifts in trade and economic policies already observable by mid-2025. This report takes a closer look at these changes and their implications.

U.S. Economy & Growth

Despite a slight contraction in Q1, the U.S. GDP managed a growth of approximately 2.4% in Q2. The unemployment rate hovers around 4.1%, while core CPI inflation has settled between 2.7%–2.9%. Economic indicators hint at noteworthy tariff revenues of around $200 billion for FY2025 and a noticeable rise in capital expenditures, around a 16.6% increase in H1 of 2025. Yet, the OECD forecasts portray a complex picture, predicting annual growth to descend to ~1.6%–1.7% with inflation around ~3.9%.

Tariffs & Trade Policy

Trump’s formidable tariff regime has set baseline rates around 15–50% across China, the EU, Canada, and Mexico. The ongoing negotiations with these major trade partners are pivotal to this administration’s approach. The recent meeting at Turnberry golf resort with EU officials aiming to agree on a 15% baseline tariff left the matter at a “50/50” juncture. The U.S. Japan trade agreement has reduced import duties to approximately 15%, a development that led markets to rally due to an agreement valued around $550 billion investments. Despite the progress, trade wars with Canada and Mexico remain unresolved with 25% tariffs on imports from both countries effective since March 4, and retaliatory measures in place.

There are also significant macro-economic impacts, with the average household cost estimated to rise from ~$1,296 in 2025 to ~$1,683 in 2026, and a projected reduction in market income by approximately 1.4%.

International & Regional Developments

OECD warnings of a global slowdown are becoming increasingly relevant with U.S. growth trimmed, inflation rising, and the worldwide forecast cut to ~2.9% for 2025–2026. International firms are feeling the strain of trade uncertainty. For instance, a decision-maker panel discovered an adverse, albeit limited, impact on U.K firms, with most firms having a low exposure to the U.S. (~3% revenue).

While there have been advancements in U.S.–U.K. trade negotiations, discussions with Pakistan are nearing a deal by the August 1 deadline. In the face of these developments, a European boycott movement against U.S. goods has emerged parallel to travel warnings issued over U.S. border policies.

Conclusion

In this dense economic climate, it is pivotal to stay updated with validated, current information. As such, the administration’s aggressive stance on tariffs and resulting trade negotiations continue to shape the domestic and international economic landscape. The implications of these strategies and policies are yet to play out fully, and it remains to be seen how both the global and U.S. economies will adapt to these changes over time.

The Trump administration’s strong hold over trade negotiations, coupled with its domestic economic strategies, indicate momentous potential for change – for better or worse, only the upcoming years will tell.