Trump says tariffs created an economic miracle: Facts differ

WASHINGTON

Looking back on the first year of his second term, President Donald Trump insists he revived the U.S. economy by imposing steep import taxes. In a Wall Street Journal op‑ed, he claimed tariffs “created an American economic miracle.” Yet much of the evidence he cites is misleading or inaccurate.

Trump often declares the U.S. was “dead” before his return. In reality, the economy was far from lifeless. Under Biden in 2024, GDP grew 2.8 percent, faster than nearly all advanced economies except Spain. Growth continued steadily from 2021 to 2023. In 2025, results were mixed. GDP shrank early in the year as firms rushed to import goods before tariffs took effect. Growth rebounded later, rising 3.8 percent in the second quarter and 4.4 percent in the third, helped by reduced imports and strong consumer spending.

Trump points to stock market highs, noting 52 records in 2025. The S&P 500 rose 17 percent, but that trailed gains abroad: South Korea surged 71 percent, Hong Kong 29 percent, Japan 26 percent, Germany 22 percent, and the U.K. 21 percent.

On inflation, Trump claimed core prices fell to 1.4 percent. That figure was distorted by a government shutdown that disrupted data collection. Core inflation for the last six months of 2025 was 2.6 percent, similar to late 2024. Overall inflation held near 3 percent. Economists note tariffs did raise costs, though exemptions softened the blow. Harvard’s Alberto Cavallo found tariffs added about 0.75 percentage points to inflation.

Trump also argued foreign producers bore most tariff costs, citing a Harvard study. In fact, the study concluded U.S. consumers carried about 43 percent of the burden, with American firms absorbing much of the rest. Import prices barely fell, showing exporters did not shoulder the majority.

On trade, Trump claimed a 77 percent drop in the monthly deficit. That reflected cherry‑picking: A plunge from January’s unusually high deficit to October’s low. For 2025 overall, the deficit reached $840 billion, up 4 percent from 2024, inflated by early‑year import surges.

Trump further boasted of $18 trillion in investment commitments. The White House itself cited $9.6 trillion, while Peterson Institute researchers estimated $5 trillion from partners including the EU, Japan, South Korea, Taiwan, and Gulf states. Analysts doubt much of this will materialize, given vague pledges and fiscal constraints abroad. By comparison, total foreign direct investment in the U.S. was $151 billion in 2024.

Despite Trump’s rhetoric, the data show tariffs delivered uneven results: some growth gains, higher consumer costs, and uncertain investment promises. The “economic miracle” remains far less clear than the president claims.