Trump Tariffs Lift Revenue but Leave Economy in 2% Growth Range
A new analysis of President Donald Trump’s second-term economic record finds that his sweeping tariff strategy has sharply raised U.S. trade taxes and narrowed the trade deficit but has not delivered either a recession or the promised manufacturing boom. The effective average tariff rate has climbed to 11.2% from 2.5%, helping drive tariff collections to $195 billion in the fiscal year ending Sept. 30, 2025—more than double the previous year—with current rates implying potential revenue of about $247 billion in 2026. Economists cited in the piece say all the tariff uncertainty is a drag on growth, with 2025 GDP expected to come in around 2%, while manufacturing employment has actually fallen and many headline‑grabbing factory announcements are years from fruition or may never materialize. So far, higher import prices have not produced a fresh inflation spike, in part because firms stockpiled goods before levies hit and some have secured exemptions, but analysts warn the full price impact may yet filter through. At the same time, a strong stock market and still‑elevated home prices have widened an affordability gap: only 21% of 2025 homebuyers were first‑timers, the lowest share since at least 1981, setting up affordability as a central political fight heading into the rest of Trump’s term.
📌 Key Facts
- The effective U.S. average tariff rate has risen to 11.2% from 2.5%, according to the Tax Foundation.
- Tariff revenues reached $195 billion in the fiscal year ending Sept. 30, 2025, more than double the previous year, and could hit $247 billion in 2026 at current rates.
- Economists project U.S. economic growth near 2% for calendar 2025, with no recession but also no manufacturing surge and falling manufacturing employment.
- The U.S. trade deficit has narrowed to a five‑year low under the higher-tariff regime.
- Only 21% of homebuyers in 2025 were first-time buyers, the lowest share since tracking began in 1981, reflecting worsening housing affordability.
📊 Relevant Data
In 2023, the homeownership rate for White Americans was 74.3 percent, compared to 45.7 percent for Black Americans, 49.5 percent for Hispanic Americans, and 63 percent for Asian Americans.
Homeownership rate by race U.S. 2023 — Statista
In 2023, racial minorities were represented in greater numbers in the manufacturing workforce than in the overall workforce, with occupational segregation leading to gaps in job types and wages.
Race and the Manufacturing Workforce: Opportunities to Expand Prosperity — Upjohn Institute
A one percentage point increase in the immigration rate raises average house sale prices by 3.3 percent, with partial demand estimates 24 percent lower due to co-location of immigrants and natives.
Decomposing the impact of immigration on house prices — Regional Science and Urban Economics
📰 Source Timeline (1)
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