President Trump’s aggressive tariff policies have shrunk the U.S. trade deficit but also helped push up consumer prices — a mixed economic record that threatens to come at a high political cost for Mr. Trump and his Republican Party.
The president’s most recent trade moves triggered more economic and political shockwaves. His suspension of tariffs on beef infuriated U.S. ranchers and GOP lawmakers while serving as a tacit admission that tariffs raise prices. Then the collapse of trade talks with Canada ignited a tariff war likely to hurt the U.S. auto industry.
The politically explosive trade fights are the latest examples of Mr. Trump’s tariffs creating more economic disruption than the relief they were intended to deliver.
“I would give him an ’F’ grade on tariffs. The purpose was to reinvigorate manufacturing, lower the deficit, without raising prices on consumers,” said Wayne Winegarden, a senior fellow in economics at the Pacific Research Institute.
“Imports and exports have shrunk, which is bad. You haven’t really changed the trade deficit and it raised prices. We’ve had a year’s worth of data, and the data does not support what Trump was claiming,” he said.
The White House disputes such criticism, hailing the tariffs as an unbridled success. And data shows the trade deficit has declined significantly.
“President Trump’s trade agenda has secured almost 20 new trade deals and trillions in investments into American manufacturing — all while the administration has lowered prices of eggs, dairy, and prescription drugs,” said White House spokesman Kush Desai. “Democrats spent decades talking about restoring middle-class manufacturing jobs and providing economic relief for working-class Americans. President Trump is actually delivering.”
Roughly one-half of a percentage point of inflation was added solely because of Mr. Trump’s tariffs, according to data from the Federal Reserve of Boston. The impact would have been much higher, around 1.4%, the Fed found, but it said the increase was blunted by increasing productivity. That means companies have tried to get more output from their workers before passing the higher costs onto customers.
Inflation stands at an annual rate of 3.4% for the 12-month period that ended in July.
The Federal Reserve also concluded that 90 to 95% of the tariff increases have been passed on to consumers. For example, Mr. Trump slapped a 50% tariff on Canadian whiskey, meaning a bottle that cost $30 before the tariffs is now selling for $45.
“It’s all just detrimental to consumers,” Mr. Winegarden said, noting that costs for more expensive items such as cars and steel have increased. “It’s the exact opposite of the policies they should be promoting.”
The administration can point to a substantial decline in the trade gap as its clearest evidence of success. Through June, the U.S. goods and services deficit was down $189.3 billion, or nearly 34%, compared with the same period last year, according to the Commerce Department.
Exports increased 11.7%, while imports were essentially flat. In addition, the deficit narrowed to $73.3 billion in June from $77.6 billion in May, Commerce said.
Tariffs had generated a significant amount of money for the federal government, but the windfall was reduced to a trickle before ultimately turning into a negative after the Supreme Court struck down most of Mr. Trump’s tariff scheme in February.
Tariff revenue had added about $30 billion a month to the federal coffers between April 2025 and April 2026. In May 2026, it fell to almost zero and became negative in June and July, meaning tariff refunds being paid outpaced new tariff revenue collected.
The manufacturing numbers have also frustrated the White House. Mr. Trump hailed the tariffs as a way to reignite a manufacturing boom in the U.S. However, manufacturing jobs declined by 75,000 between Mr. Trump’s inauguration and June, according to the most recent Labor Department numbers.
Those job losses stand in sharp contrast to the Biden administration, where manufacturing added 600,000 jobs during his four years in office.
But some industries have benefited. Domestic steel is among the industries that credit their resurgence to Mr. Trump’s tariffs.
“The tariffs have been helpful and quite effective for the steel industry,” said Kevin Dempsey, president and CEO of the American Iron and Steel Institute. “We’ve seen imports decline substantially and, more importantly, the share of the U.S. market taken by imports has declined.”
Under the administration’s steep 50% tariffs on foreign steel, domestic steel output rose by millions of tons, with 4 million tons of new crude steelmaking capacity planned or underway in West Virginia, South Carolina and other states. Those expanded or new steel plants will bring more jobs to the area, the White House says.
That disparity illustrates one of the fundamental complications of tariffs: A duty that protects a steel mill can raise costs for an automaker, appliance producer or construction company that purchases steel.
Mr. Trump had promised that tariffs would shrink America’s trade deficit. While that has happened, other factors have played a role. Currency fluctuations, decreasing U.S. demand for foreign imports and companies moving goods ahead of schedule also contribute to the decrease in the trade gap.
In June, the U.S. trade deficit was 34% smaller than it was during the same period in 2025, according to data from the U.S. Trade Representative Office.
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