Introduction
The U.S. landscape has changed since the inauguration of Donald J. Trump as the 47ᵗʰ President on January 20, 2025, with J.D. Vance serving as Vice President. His administration has tackled various policies; particularly trade. These policies are having rippling effects on the economy. Let’s examine the U.S. administration, its economic policies, and their global implications.
US Economy and Growth
By mid-2025, the United States saw a GDP growth of approximately 2.4% in Q2 after a slight contraction in Q1, and an unemployment rate around 4.1%. Additionally, core CPI inflation remained steady between 2.7% – 2.9%. Economic experts such as the OECD project growth to slow slightly to around 1.6%–1.7% by year’s end, with inflation rising to approximately 3.9%.
Fiscal success is visible in tariff revenues ballooning to around $200 billion. The blue-collar wage growth hit about 1.7%, and capital expenditures rose by about 16.6% in the first half of 2025.
Tariffs & Trade Policy
The Trump administration has pursued a robust tariff agenda. Baseline rates around 15–50% have been established with China, the EU, Canada, and Mexico. But, despite ongoing negotiations, the status of a sought-after deal with the EU remains “50/50”. Conversely, trade with Japan improved as import duties were scaled back to around 15%, sparking a market rally for investments approximated at $550 billion.
Disagreements with Canada and Mexico resulted in 25% tariffs on imports from both countries effective March 4. Meanwhile, a Court of International Trade decision in May 2025 ruled that tariffs imposed under IEEPA exceeded presidential authority, blocking enforcement.
Impact forecasts are predicting an average household cost increase of approximately $1,296 in 2025, potentially rising to about $1,683 in 2026. Businesses and consumers alike should anticipate a gradual increase in consumer prices of about 2% over the next two years.
International & Regional Developments
According to the OECD, the global slowdown continues with U.S. growth being trimmed, inflation rising, and the global forecast slowing to about 2.9% for 2025–26. In the UK, trade uncertainty has a variable impact on firms, reflecting a modest negative effect overall. Some backlash has also arisen, particularly in Europe, with a boycott movement targeting U.S. goods gaining momentum.
Conclusion
While the economic policies of the Trump administration have sparked complex reactions at home and abroad, understanding the numbers is key to informed interpretation and decision-making. From GDP growth to tariff disputes, and beyond, the U.S. economic landscape continues evolving — demonstrating the ongoing interconnectedness of the global economy in the 21st century.
If you’re keen on understanding more complexities of U.S. economic policy, stay with us for more updates and analysis!