Trump's newly implemented tariffs now in force
In a move that has far-reaching consequences, President Donald Trump implemented new tariffs on Thursday, affecting nearly 70 countries. These tariffs, part of a "new system of trade" aimed at prioritising fair and balanced trade, have created complex economic impacts across the United States and beyond.
The tariffs range from 10% to a maximum of 41%, and they disproportionately hit certain sectors. For instance, clothing and textiles, including shoes and apparel, are expected to see significant price increases. According to the Yale Budget Lab, these tariffs could cost American households an average of $2,400 more annually in 2025 alone.
The tariffs have a direct impact on the U.S. economy as well. Real GDP growth is projected to decrease by about 0.9 percentage points in 2025, causing the economy to remain roughly 0.5% smaller in the long run, equivalent to $135 billion annually. GDP growth projections have fallen from 2.8% in 2024 to about 1.4% in 2025 due to tariff effects.
The labour market is also affected, with unemployment increasing by 0.5 percentage points by the end of 2025, translating to roughly 641,000 fewer payroll jobs nationwide. California, in particular, experiences strong impacts, losing over 64,000 jobs and facing significant business tariff costs—$11.3 billion so far in 2025.
Manufacturing output grows by about 2.6% due to protective tariffs, but this gain is offset by contractions in construction (-4.1%) and agriculture (-0.8%), indicating uneven sectoral effects and trade-offs within the economy.
Tariffs on key trading partners like the EU and Mexico have been raised to 30%, disrupting trade relationships and prompting retaliatory tariffs. Ports such as Los Angeles operate below capacity (70%), and trade/logistics job postings have fallen by 40%, indicating ongoing supply chain and economic disruption.
The White House has reached trade agreements with the United Kingdom, Vietnam, Indonesia, and has a preliminary accord with China. However, these agreements do not mitigate the immediate impacts of the tariffs, and legal and political pushback continues. States like California are challenging the president’s authority to impose these tariffs unilaterally, citing harm to key sectors in major economies within the U.S.
In summary, Trump's tariffs create complex economic impacts: they raise costs for U.S. consumers, slow overall economic growth, increase unemployment, benefit manufacturing at the expense of other sectors, and strain key international partnerships and supply chain infrastructure.
[1] Yale Budget Lab report on Trump's tariffs: https://budgetlab.yale.edu/tariffs-cost-american-households-2400-2025/ [2] Council of Economic Advisers report on tariff impacts: https://www.whitehouse.gov/wp-content/uploads/2018/08/4585-Report-from-the-Council-of-Economic-Advisers-on-Tariffs-and-Trade-Barriers.pdf [3] Congressional Budget Office report on tariff impacts: https://www.cbo.gov/publication/55166 [4] Federal Reserve Bank of New York report on tariff impacts: https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci20-1.pdf [5] Port of Los Angeles operational data: https://www.portoflosangeles.org/maritime/cargo/container-operations/container-terminals/ [6] U.S. Census Bureau trade data: https://www.census.gov/foreign-trade/balance/c5900.html
- The Yale Budget Lab's report suggests that Trump's tariffs could cost American households an average of $2,400 more annually in 2025 alone.
- The tariffs have caused the U.S. economy to grow slower, with GDP growth projections falling from 2.8% in 2024 to about 1.4% in 2025 due to tariff effects.
- The labor market is affected as well, with unemployment increasing by 0.5 percentage points by the end of 2025, translating to roughly 641,000 fewer payroll jobs nationwide.
- Tariffs on key trading partners like the EU and Mexico have disrupted trade relationships, prompting retaliatory tariffs and causing ongoing supply chain and economic disruption, as indicated by a 40% decrease in trade/logistics job postings and ports operating below capacity.
