Trump's Tariff Claims: A Deep Dive into the 'American Economic Miracle'
Former US President Donald Trump has repeatedly asserted that his administration's broad tariffs on various countries revitalized the American economy. In a recent opinion piece published in The Wall Street Journal, Trump boldly declared that these tariffs have forged what he describes as an "American economic miracle." He further criticized economists and detractors who warned that such protectionist measures would backfire, potentially raising consumer prices and stifling economic growth.
"When I imposed historic tariffs on nearly all foreign countries last April, the critics said my policies would cause a global economic meltdown," Trump wrote. "Instead, they have created an American economic miracle, and we are quickly building the greatest economy in the history of the world, with other countries doing just fine!"
Examining the Claims: Fact vs. Fiction
However, a closer examination reveals that Trump's assertions often rely on selective data and exaggerated interpretations, with many claims not fully supported by empirical evidence.
Claim: "Just over one year ago, we were a ‘DEAD’ country. Now, we are the ‘HOTTEST’ country anywhere in the world!"
The United States was far from economically "dead" when Trump returned to the Oval Office for his second term. Despite a somewhat turbulent start, the economy demonstrated robust performance overall. In 2024, the final year of the Biden presidency, America's inflation-adjusted gross domestic product grew by 2.8%, outpacing most wealthy nations except Spain. Furthermore, the economy maintained healthy expansion rates from 2021 through 2023.
The initial impact of Trump's tariffs, or even the threat of their implementation, yielded mixed results during the first three quarters of his term. Full-year data for 2025 remains unavailable, but quarterly figures tell a nuanced story. From January to March 2025, US GDP contracted for the first time in three years, primarily due to a surge in imports as American companies stockpiled foreign goods ahead of potential tariff hikes. Since imports are subtracted from GDP calculations, this spike dragged growth into negative territory.
This slowdown proved temporary. Growth rebounded sharply in the second quarter, with the economy expanding at an annualized rate of 3.8% from April to June. Momentum strengthened further in the third quarter, accelerating to 4.4%. This recovery was partly driven by a decline in imports, reflecting both the impact of tariffs and earlier stockpiling, alongside strong consumer spending.
Stock Market and Inflation: Selective Metrics
Trump has also highlighted gains in the US stock market, noting that stocks achieved record highs 52 times in 2025. While the market posted solid gains, its performance lagged behind several global peers.
Regarding inflation, Trump claimed, "Annual core inflation for the past three months has dropped to just 1.4% - far lower than almost anyone, other than me, had predicted." According to the Associated Press, this statement relies on cherry-picked data to vastly exaggerate the current inflation landscape. Trump's preferred metric—annual inflation over the past three months excluding food and energy—is indeed low but distorted. A government shutdown in October and November disrupted data collection, forcing statistical agencies to rely on rough estimates that artificially suppressed overall inflation figures.
Core inflation over the final six months of 2025 stood at 2.6%, lower than January 2025 levels but roughly consistent with October 2024. Overall inflation has largely plateaued this year, running at 3% in September before the shutdown—identical to January 2025 levels. It is true that inflation did not spike as sharply as many economists feared when Trump began rolling out tariffs last spring. However, this is partly because many of the so-called "Liberation Day" tariffs were later withdrawn, scaled back, or riddled with exemptions.
The impact of tariffs is more evident in core goods prices, which also exclude food and energy. Before the pandemic, core goods prices typically rose minimally or even declined year after year. By December 2025, however, they were 1.4% higher than a year earlier—the most significant increase outside the pandemic since 2011.
Trade Deficit and Investment Pledges: Questionable Figures
Claim: "The data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen… paying at least 80% of tariff costs."
A study cited by Trump, co-authored by economist Cavallo, appears to show the opposite. It finds that US consumers bore approximately 43% of tariff-related costs after seven months, with most of the remainder absorbed by US firms. Cavallo noted that import prices barely declined, suggesting foreign exporters did not reduce prices enough to shoulder the majority of the burden.
Claim: "We have slashed our monthly trade deficit by an astonishing 77%."
This figure relies on cherry-picked data, comparing an unusually large deficit in January 2025, when Trump took office, with an unusually small one in October. The broader trend is less flattering. From January through November 2025, the US ran a trade deficit of nearly $840 billion, about 4% higher than during the same period in 2024. Imports surged in the first three months of the year as companies rushed to buy foreign goods ahead of tariffs. While monthly deficits fell later in the year, the early import spike was so substantial that the year-to-date deficit still exceeds the previous year's.
Claim: "I have successfully used tariffs to secure colossal investments in America… more than $18 trillion."
Trump did employ tariff threats to extract investment pledges from trading partners. The European Union alone promised $600 billion over four years. However, the administration has not clarified how it arrived at the $18 trillion figure. The White House has cited $9.6 trillion in public and private commitments. Researchers at the Peterson Institute for International Economics estimate pledges at approximately $5 trillion from the EU, Japan, South Korea, Taiwan, Switzerland, Liechtenstein, and Gulf states including Saudi Arabia, Qatar, Bahrain, and the UAE.
They also caution that many pledges are vague and may never fully materialize, partly because some countries would struggle to finance them. The numbers are large by any measure. Total private investment in the US currently runs at about $5.4 trillion annually. In 2024, foreign direct investment—money invested in factories, offices, and other physical assets—totaled just $151 billion.
In summary, while Trump's tariff policies have influenced economic dynamics, his claims of an "American economic miracle" are often bolstered by selective data and exaggerated interpretations, with mixed outcomes evident in GDP growth, inflation metrics, trade deficits, and investment pledges.
