Trump praised his tariffs as an ‘economic miracle’ — a quick fact check says otherwise
In his second stint at the White House, President Donald Trump has upended decades of U.S. trade policy with double-digit tariffs on imports from several countries. Businesses have reported difficulties because of this additional cost, and several companies have even sued the Trump administration for refunds. But the president has maintained that his trade policy is an astounding success, and most recently, in his opinion piece in The Wall Street Journal, he claimed the tariffs "created an American economic miracle." The Associated Press fact-checked Trump's claims, and the actual numbers paint a different picture.
In his op-ed, the president wrote, "Just over one year ago, we were a ‘DEAD’ country. Now, we are the ‘HOTTEST' country anywhere in the world!’" However, as per AP, the economy wasn't dead in the last year of the Biden presidency as the U.S. GDP grew 2.8%, adjusted for inflation in 2024, marking the sharpest increase among the wealthiest countries in the world except Spain. On the other hand, from January to March in 2025, Trump's first year in office, the GDP shrank for the first time in three years, and growth only rebounded in the second half of the year. From July through September, it grew at a breakneck pace of 4.4%, partly due to a decline in imports caused by the tariffs and the fact that importers were already stocked up at the beginning of the year.
The president further claimed, "annual core inflation for the past three months has dropped to just 1.4%," far lower than anyone's prediction. The publication pointed out that the data were cherry-picked as they excluded volatile food and energy prices. The government shutdown led to a distortion of data, as agencies were forced to use rough estimates that artificially inflated the inflation rate. When annual inflation for the second half of 2025 is considered, it comes out higher at 2.6%. The publication does note that inflation hasn't been as high as economists feared, partly due to Trump rolling back some of his "Liberation Day" tariffs. The data further shows core goods prices rose 1.4% in December, marking the largest increase outside the pandemic since 2011.
The next claim that the president made was that "the burden, or ‘incidence,’ of the tariffs fell overwhelmingly on foreign producers and middlemen, and according to a study from the Harvard Business School, the groups mentioned paid for "80% of tariff costs.” However, AP found that the study cited by Trump concluded the opposite of what he claimed. Alberto Cavallo, an economist at Harvard who authored the study with two colleagues, found that consumers were roughly bearing 43% of the tariff-induced costs, with the remainder absorbed mostly by U.S. firms. Cavallo told the publication by email that import prices hadn't come down by much, “which suggests foreign exporters did not reduce their pre-tariff prices enough to shoulder a large share of the burden.″
The next big claim of the president was that his trade policy "slashed deficits by an astonishing 77%," and this, too, involves a lot of cherry picking. The reality is that when the news spread that Trump was going to impose sweeping tariffs again, importers rushed to stock up on foreign products in the first three months of the year, pushing the trade deficit higher. After that, the deficit continually fell, but the initial surge was so big that the 2025 year-to-date trade deficit still exceeds 2024's.
Lastly, Trump claimed he had "successfully wielded the tariff tool" to secure $18 trillion in investment commitments for the country, which is "unfathomable to many.’’ AP noted that the president didn't clarify how the $18 trillion number was calculated, as the White House has published a figure of $9.6 trillion in private and public investment commitments from other countries. A report from the Peterson Institute for International Economics last month cited $5 trillion in investment pledges from multiple countries. Nevertheless, the publication added that the numbers are huge, as in 2024, total foreign direct investment in the U.S. amounted to only $151 billion.
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