Introduction
The 47th President of the United States, Donald J. Trump, already six months into his term since inauguration on January 20, 2025, has reshaped the trade and economic landscape. Aided by Vice President J.D. Vance, the administration has been assertive, employing policies with far-reaching consequences touching our pockets and the international community. Here’s a mid-year overview of the economy, trade policies, and the emerging international sentiments based on the most current verified data.
Trump’s Economic Touch and Growth Indicators
Under Trump, Q2 GDP growth (~2.4%) mirrored a resurge following a slight Q1 contraction, and unemployment recorded a low (~4.1%). Core CPI inflation lingered around 2.7%–2.9%, with OECD forecasts projecting a gradual increase to ~3.9% by year end along with trimmed growth (~1.6%–1.7%).
Blue-collar wage growth (~1.7%) and rising capital expenditures (~16.6% H1 2025) sketch an interesting economic panorama under the administration. While Treasury- reported tariff revenues stand at an impressive ~$200 billion in FY2025, the road ahead promises intriguing developments.
Dealing in ‘Tariffs’ – Trump’s Trade Game
Trade relations have been put to the test under Trump’s aggressive tariff regime across China, the EU, Canada, and Mexico; baseline rates stand at around 15–50% by the August 1 deadline. Under the EU negotiations at Turnberry golf resort, a looming 15% baseline tariffs possibility exists, and in contrast, a much favorable US-Japan trade agreement reduces import duties to ~15%, propelling market rallies.
Simultaneously, ongoing trade negotiations with China in Stockholm are crucial, as a tariff truce extension above 55% tariffs is on the table. Retaliatory measures by Canada & Mexico due to a 25% tariff imposition were, however, expected. Of note, a significant legal challenge came in May 2025 when the Court of International Trade declared the tariffs imposed under IEEPA exceeded presidential authority.
Macroeconomic Impact and Consumer Prices
The aggressive tariff strategy might hit the average American household hard. Projected costs suggest an increase from ~$1,296 in 2025 to ~$1,683 in 2026. Consequently, a negative impact on market income is anticipated, estimated around 1.4%. As businesses adjust, consumer prices are expected to rise ~2% over two years.
Warm Reception or Cold Shoulders? The International View
Warnings of a global slowdown come from OECD with U.S. growth trimmed and inflation rising. A slowdown to ~2.9% in ’25-’26 is projected globally. Trade uncertainty also impacts UK firms as they see modest negative impacts with low average exposure (~3% revenue). On an optimistic note, U.S.-U.K. negotiations and Pakistan are progressing steadily.
Furthermore, European boycott movements against U.S. goods, travel warnings over U.S. border policies, and retaliatory tariff actions from Canada and Mexico indicate a contentious international outlook.
Conclusion
The mid-year landscape under President Trump shows assertive economic and tariff strategies, leading to significant domestic and international implications. Economically, the coming half-year will reveal more about the U.S.’s financial health. On the trade front, the outcome of ongoing negotiations and legal challenges will critically shape the administration’s legacy.
As political and economic observers, we must navigate this intricate web of policies and actions carefully to appreciate the full impact down the line. Keep abreast of the latest developments, and stay informed. Awareness is the first step to understanding our narratives and crafting our responses.