The true costs of Donald Trump's economic agenda are staggering

America's loss of competitiveness behind tariff walls could send its economy into long-term decline and crush its advantages

- KAUSHIK BASU

The first six months of Donald Trump's second presidency in the United States have been marked by a flurry of executive orders and legislative activity unparalleled in American history, with the possible exception of Franklin D. Roosevelt's first 100 days in office.

The key difference is that Roosevelt's New Deal was a radical—and ultimately successful—effort to pull the US out of the Great Depression. By contrast, Trump's policy drive lacks such a clear and immediate catalyst, as the US economy was performing well before he came to office.

Rather than responding to an economic crisis, Trump's policies seek to reorient the American economy by revitalizing its once-dominant manufacturing sector. Whether they will succeed is far from certain.

Weaponization of international trade is at the top of Trump's economic agenda. Since April, he has imposed sweeping 'reciprocal' tariffs on almost every country in the world, then adjusted them repeatedly—lifting some, lowering others and reinstating or increasing many. As a result, the average effective US tariff rate has surged from 2% in 2024 to more than 16%, its highest level since the 1930s.