OPINION:
Nine months into President Trump’s trade war, a steady stream of economic data continues to warn that the broad tariffs the U.S. has imposed on our trading partners are inflicting real damage on American growth, jobs and prosperity.
Overall job growth slowed markedly during the first nine months of the year. Nonfarm payroll employment averaged just 75,000 new jobs per month through August, less than half the monthly average of last year. In August alone, only 22,000 jobs were added. Without gains in private education and health services, August would have shown negative job growth. Jobs disappeared in well-paying sectors, including construction, business services and mining. Manufacturing, hit hard by trade disruptions across multiple fronts, is now in a seven-month output contraction, with 78,000 job losses through August.
The slowdown reflects broader uncertainty, as businesses hesitate to hire amid retaliatory tariffs from diverse partners and supply chain chaos. Imports and exports sustained a 50% plunge by June, with U.S. shipments plummeting to key markets as retaliatory duties from Asia, North America and Europe took hold.
China has no plans to import additional American soybeans this year. The effective tariff rate for farmers’ inputs has increased twelvefold since Mr. Trump took office. As a result, nitrogen fertilizer prices have risen 15% in the past year, stunting farmers’ corn yield. Family farm bankruptcies are up a stunning 57% over last year.
Meanwhile, the once-booming export market for American liquor is shriveling. U.S. beverage exports to Canada were down 60% over the first six months of the year, and stock prices for major American wineries and distilleries are down 30% this year.
The trade deficit, a fixation for the president, has stubbornly widened overall to $78.3 billion in July, the largest since March and higher than the monthly average in 2023 and 2024. To be clear, a trade deficit is not economically harmful; those dollars flow back to the United States to purchase government debt (holding down borrowing costs) and invest here at home. Still, if the president intends to ratchet up tariffs to remedy the problem, don’t expect an erasure of the gap anytime soon.
Far from “winning,” the U.S. is experiencing economic pain. The dollar has weakened 9% this year amid the turmoil, losing its safe-haven appeal and making U.S. exports somewhat more competitive but inflating import costs. In fact, the dollar is on track for its worst year since 1973, when President Nixon fully removed the currency from the gold standard. This dollar plummet has compounded woes, with currencies such as the euro and peso appreciating relatively amid retaliatory measures.
Tariffs have produced a gusher of revenue for the government. Treasury Secretary Scott Bessent calls this a “surcharge,” but it’s effectively a tax hike on families and businesses. Newly imposed tariffs are projected to total $175 billion in tax increases this year and a whopping $2.4 trillion over 10 years. Ultimately, the president’s tariff tax hike could reduce typical family income by more than $3,000 annually.
A select few favored businesses will benefit from protectionism. Tariff lobbyists are certainly enjoying their increase in fees generated this year, but millions of other families, businesses and consumers suffer the costs. Price hikes are rippling through the economy. Overall inflation accelerated at a 4.6% annual rate last month, more than double the Federal Reserve’s target. Clothing, groceries, baby strollers, appliances and furniture prices are increasing at even faster clips this year.
For many families, the costs of the tariffs dwarf the benefits of the recently passed tax cuts. Tariffs are causing rising prices on lumber, gypsum, steel, kitchen cabinets and bathroom vanities.
Foreign direct investment has plunged despite the president’s claims of booming inflows. Overall, foreign direct investment into the U.S. this year is down 13% from last year. Investments by China, Europe and North America have cratered as tensions deter deals, starving American industries of capital and jobs that once flowed from abroad.
Finally, growth in gross domestic product has decelerated under the weight of the conflict. U.S. real GDP in the first half of the year averaged just 1.58%, down from an already lackluster 2.22% the first half of 2024. Even this sluggish growth may be rosier than the reality experienced by most. Harvard University estimates that GDP growth was just 0.1% in the first half of 2025, excluding data centers.
These indicators are warning signs: The trade war isn’t delivering victories. It’s eroding America’s economic edge over the rest of the world. Congress must reassert its constitutional role over the taxing power and end these tariffs now. Focusing on what we know creates growth: tax reductions, a slimmer government, regulatory reform, energy abundance and free trade.
• Joel Griffith is a senior fellow at Advancing American Freedom.
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