Why everyone got Trump’s tariffs wrong

Inthe days following “Liberation Day,” the contrast between Trump's optimism and more dire predictions from trade experts and economists was stark.

- Chao Deng & Drew An-pham

A lot of federal data is delayed, but the numbers so far show the U.S. economy has held up.

(AFP)

As businesses and consumers tried to make sense of the mixed messages, the president doubled down on promises he'd made during his 2024 presidential campaign. “The markets are going to boom, the stock [market] is going to boom, the country is going to boom,” he said on April 3.

Economists and business leaders dialed up predictions ofa fallout. BlackRock’s Larry Fink said “most CEOs I talk to would say we are probably in a recession right now.” JPMorgan Chase said a global recession was even likely.

Aneconomiccollapse hasn't materialized. Neither has an economic revival.

A lot of federal data is delayed, but the numbers so far show the U.S. economy has held up. The odds of a recession in the coming year have fallen below 25%.

While Trump’spromise on tariffrevenues happened toa degree, most of his others have fallen flat. The U.S. has seen little evidence of large-scale reshoring. Cheaper labor abroad continues to give foreign manufacturers an edge, while uncertainty at home over the tariffs has kept many companies from making major investments or bringing manufacturing home.

Eight months into the tariff regime, Trump’s policies haven't done much to boost employment. In fact, a host of large layoff announcements and other troubling labor data signal difficult times for workers.

The U.S. added 119,000 jobs in September , far more than economists had expected. But the figure was an outlier from previous months, in which job growth had lagged. As of September, the unemployment rate reached 4.4%, the highest in four years. Economists don’t rule out tariffs leading to more hiring down the road, but the picture is complex.