Donald Trump’s second presidential term is marked by the reimposition of reciprocal tariffs, raising US import duties from 2.5% to nearly 18%. While aimed at protecting domestic industries, these tariffs have triggered inflation, slowed growth, and unsettled global trade.
Inflation and Monetary Policy
Tariffs have pushed retail inflation from 2% to around 3%, forcing the Federal Reserve to delay planned interest rate cuts. Rising producer prices suggest further consumer cost pressures, complicating economic stability.
Growth and Employment
US GDP growth is projected to fall from nearly 3% in 2024 to just 1.9% in 2025, with risks of stagflation emerging. Employment growth has slowed, unemployment has edged up, and job creation has disappointed, reflecting tariff-related drags.
Stock Markets and Dollar Weakness
While the tech-heavy NASDAQ 100 surged over 10%, broader indices like the S&P 500 and Dow Jones show sluggish performance, highlighting uneven impacts. At the same time, the US dollar has weakened against major currencies, challenging America’s global economic dominance.
Trump’s tariff-driven policy has created a mixed economic picture—boosting select sectors but fuelling inflation, slowing growth, and undermining long-term stability.
