Why Trump's tariffs failed to make America great
Contrary to claims that tariffs would shrink the US trade deficit, the goods trade deficit hit an all-time high of $1.241 trillion in 2025
The Trump administration's ambitious tariff strategy against China has failed to achieve its stated economic and geopolitical goals, according to government and industry sources, leaving the US trade deficit at record highs, manufacturing under pressure, and China seizing new global markets.
Trade gap worsens despite tariffs
Contrary to claims that tariffs would shrink the US trade deficit, the goods trade deficit hit an all-time high of $1.241 trillion in 2025, a 2.1% increase from the previous year. While the combined deficit for goods and services fell marginally to $901.5 billion from $903.5 billion in 2024, the gains were largely symbolic, says the Chosun Daily.
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The tariffs succeeded in reducing imports from China by nearly 30% to their lowest level since 2009, but US companies shifted their sourcing to countries including Vietnam, Southeast Asia, India, and Taiwan.
As a result, total US imports rose 4.5% ($145 billion), undermining efforts to narrow the deficit. Analysts emphasize that nearly all of the financial burden of tariffs-an estimated 96%-fell on US firms and consumers rather than foreign exporters.
Legal uncertainty further complicated the picture. The US Supreme Court ruled that the president cannot unilaterally impose tariffs under the International Emergency Economic Powers Act, prompting the administration to implement a temporary 10% global tariff while seeking alternative legal authorities to sustain its trade policy framework.
Manufacturing gains remain elusive
The tariffs, intended to rejuvenate US manufacturing, largely stunted growth in the sector. Over 83,000 manufacturing jobs were lost in 2025, and factory output stagnated for much of the year. Only in January 2026 did production rise by 0.6%, marking the largest monthly gain in 11 months, reports Reuters.
Certain sectors-particularly technology, machinery, electronics, and motor vehicles-showed modest growth, but economists attribute this largely to an "artificial intelligence spending boom," not tariff-driven protection. High costs of imported inputs and disrupted supply chains continued to squeeze domestic manufacturers.
China turns challenge into opportunity
While US imports from China plummeted, Beijing leveraged the trade conflict to expand its global influence. Overall Chinese exports grew over 5% in 2025, driving a record trade surplus of $1.2 trillion. To offset losses from the US, China redirected trade toward ASEAN countries, increasing sales by 13%, and to the European Union, which rose by 8%, says the Guardian.
Strategic partnerships also flourished. Canada signed new economic agreements with China, citing adaptation to "new global realities," while South Korea engaged in high-level state visits with Beijing. This realignment illustrates a growing willingness among US allies to diversify partnerships in response to Washington's unilateralism.
China's overproduction has flooded global markets with everything from steel to electric vehicles, prompting over 300 antidumping investigations worldwide and spurring countries like Mexico and India to raise tariffs on Chinese imports. Sources describe this "export-led surge" as "strangling" manufacturers across both developed and emerging economies.
Erosion of the international trading order
The tariffs accelerated the breakdown of the World Trade Organization and the rules-based trading system established after World War II. Traditional allies, frustrated by US pressure, increasingly bypass Washington, negotiating trade agreements with China and India. European officials have even questioned the WTO's "most favored nation" principle, suggesting that access to low tariffs should be "earned" through commitments to fair trade rather than guaranteed, says the BBC.
Diplomatic turbulence extended to domestic politics abroad. In Canada, political instability-partly attributed to the US trade threat-led to the resignation of Prime Minister Justin Trudeau after his deputy criticized the government's handling of US pressures.
US global standing in decline
Rather than strengthening American influence, tariffs have contributed to a perception of the US as an unreliable partner. Favorability ratings in France, Germany, Japan, the UK, and Canada fell to near-record lows.
The Supreme Court's decision undermined US negotiating leverage, leaving international partners skeptical of Washington's ability to enforce trade threats, according to the Pew Research Center.
Domestically, policymakers faced setbacks. Job losses, stalled manufacturing growth, and rising input costs undermined claims that tariffs would bolster the US economy. Analysts warn that partisan polarization and internal governance challenges further weaken Washington's ability to project power globally.
The Trump-era tariffs illustrate the limits of unilateral protectionism in a globalized economy. Far from "making America great," the policies have exacerbated domestic economic pressures, failed to reduce the trade deficit, and created openings for China to expand its influence across Asia, Europe, and North America.
Experts argue that the episode underscores the complexity of global trade, where attempts to isolate one player can reverberate across markets and alliances in unforeseen ways.
