Trump credits tariffs for growth, but facts show a more mixed year
President Donald Trump, looking back on the first year of his second term, has portrayed tariffs as driving an economic rebound and low inflation, and he has highlighted selected trade and investment numbers as proof. In a recent opinion piece in The Wall Street Journal, he wrote that critics who predicted tariffs would backfire were wrong, saying instead that they “have created an American economic miracle,” according to the AP fact check.
AP’s review says parts of Trump’s assessment rely on comparisons that omit key context, and it describes some of the economic performance during 2025 as mixed rather than consistently improving. The check also says some inflation figures Trump used were affected by disruptions that forced government data compilers to estimate certain categories, while it describes evidence about tariff costs as pointing in a different direction than Trump claimed.
Growth: import surges early in 2025, then rebounds later
Trump’s argument rests in part on the idea that the economy was “dead” when he returned to office and then turned into the “hottest” economy anywhere after tariffs. AP said that description contradicts the economic starting point: it says the U.S. was hardly “dead” when Trump took office, pointing to American gross domestic product growth of 2.8% in 2024, adjusted for inflation.
AP also described how 2025’s GDP performance differed by quarter. It said U.S. GDP shrank from January through March for the first time in three years, blaming a surge in imports as American companies rushed to buy foreign products ahead of tariff implementation. The check then said growth rebounded later in the year, with the economy expanding at 3.8% from April through June and at 4.4% from July through September, attributing a big part of the late-year surge to a drop in imports and to strong consumer spending.
AP also contrasted Trump’s stock-market message with other countries’ performance. It said Trump pointed to U.S. stocks hitting new highs 52 times in 2025, and while that is true, it says the S&P 500’s 17% climb fell short of larger gains elsewhere, including South Korea (71%), Hong Kong (29%), Japan (26%), Germany (22%) and the United Kingdom (21%).
Inflation: “core” numbers were lower in the short window, with data disruption context
Trump also argued that “annual core inflation for the past three months has dropped to just 1.4%.” AP said the figure is low but described it as cherry-picked and distorted, saying the measure reflects data disruption tied to the government shutdown in October and November, when the government’s data collection was disrupted and the agency compiling the figures was forced to plug in rough estimates in some categories that “artificially lowered overall inflation.”
AP said annual core inflation for the final six months of 2025 was higher, at 2.6%, and it said overall inflation had leveled off this year and was 3% in September, the same as it had been in January 2025. AP’s check also said parts of the tariff rollout were modified, with some “Liberation Day” tariffs withdrawn, reduced or riddled with exemptions, and it cited the administration rolling back tariffs on items such as coffee, beef and kitchen cabinets after Democrats won high-profile elections by emphasizing affordability.
AP added that it could see tariff impacts more clearly in core goods prices, which it described as excluding food and energy. It said core goods costs had typically barely risen before the pandemic, but that last December they were 1.4% higher than a year earlier—described as the largest increase outside the pandemic since 2011.
Tariff incidence: a study Trump cited points to consumers and U.S. firms, not foreign producers
Another Trump claim addressed who bears the costs of tariffs. He said the data showed tariffs’ “incidence” fell overwhelmingly on foreign producers and middlemen, including large corporations not from the U.S., and he cited a Harvard Business School study saying those groups pay at least 80% of tariff costs.
AP said the study Trump cited appears to conclude the opposite. It said the research, authored by Alberto Cavallo and two colleagues, found that “U.S. consumers were bearing roughly 43% of the tariff-induced border cost after seven months,” with the remainder absorbed mostly by U.S. firms. AP also said Cavallo, by email, argued that import prices had not fallen much, which AP summarized as suggesting foreign exporters did not reduce pre-tariff prices enough to shoulder a large share of the burden.
Trade deficit: “77%” drop was tied to a short comparison, not a broader improvement
Trump also claimed, “We have slashed our monthly trade deficit by an astonishing 77%.” AP said that figure involved cherry-picking, comparing the drop from a very high trade deficit in January 2025 to a super-low deficit in October.
AP’s check said the broader picture was more complicated: it said the trade deficit has risen since Trump returned to the White House, and that from January through November in 2025 the U.S. accumulated a trade deficit of nearly $840 billion, up 4% from the same period in 2024. It said importers’ early-year rush to buy foreign products before tariffs were imposed contributed to the large January-March deficit and that monthly deficits later in 2025 were consistently lower than in 2024, but not enough to offset the early surge.
Investment pledges: large numbers exist, but the “$18 trillion” origin is unclear
Trump said he wielded the tariff tool to secure “colossal” investments and claimed that “in less than one year, we have secured commitments for more than $18 trillion.” AP said that Trump’s tariff threat did help pry investment commitments from major trading partners, citing the European Union’s pledge of $600 billion over four years.
But AP said Trump did not explain how he arrived at the $18 trillion figure, and it said the White House had published a figure of $9.6 trillion that includes private and public investment commitments from other countries. AP also said researchers at the Peterson Institute for International Economics calculated investment pledges at $5 trillion from the EU, Japan, South Korea, Taiwan, Switzerland, Liechtenstein and the Persian Gulf states of Saudi Arabia, Qatar, Bahrain and the United Arab Emirates, and AP said those researchers raised doubts about whether the money will materialize because some agreements are vague and because countries might strain to afford commitments.
Even so, AP said these are still large amounts, and it placed them in context by noting that total private investment in the United States was running at a $5.4 trillion annual pace most recently, and that in 2024, the last year for which figures were available, total foreign direct investment in the U.S. amounted to $151 billion.
AP said its fact check reflects on the facts around Trump’s assessment of tariffs and the economic results he cited, and it directed readers to its Fact Checks collection at https://apnews.com/APFactCheck.