A year ago, President Trump imposed double-digit tariffs on nearly all U.S. imports, promising jobs, factories and lower consumer prices. On the first anniversary of “Liberation Day,” many of those tariffs have been curtailed by the Supreme Court, but tariffs remain a central policy.
The government collected a lot of money but must refund much of it
Tariffs generated tens of billions in federal revenue. In the first five months of the fiscal year the government raised $151 billion from tariffs — nearly four times the same period the year before. Most of that bill was paid by U.S. importers and in some cases passed to consumers. After a recent Supreme Court ruling that the president exceeded his authority with some tariffs, roughly half of the total tariff revenue will need to be refunded. Customs officials are preparing to return about $166 billion in wrongly collected duties, with details expected by mid-April.
A boom in domestic manufacturing hasn’t materialized
The tariffs were intended to revive U.S. manufacturing. Instead, manufacturing has largely been in a slump: U.S. factories employed about 89,000 fewer people in February than in April, when the tariffs took effect. The administration points to foreign companies investing in the U.S. to avoid tariffs, but official figures show foreign direct investment last year was $288 billion — slightly below the prior year and below the 10-year average.
Inflation remains elevated
Although inflation has fallen from its 2022 peak, prices are still rising faster than the Federal Reserve would like, in part because tariffs have raised the cost of goods. Inflation in February was 2.4%, a touch higher than last April. Fed Chair Jerome Powell said recent elevated readings largely reflect inflation in the goods sector, boosted by tariffs. Economists also warn that inflationary pressure could worsen after the U.S. and Israel began military action against Iran, which pushed global energy prices higher.
The trade deficit hasn’t changed much
Imports fluctuated last year as businesses stockpiled goods before tariffs took effect or during temporary rate reductions. Over 2025, Americans actually imported slightly more goods than in 2024. Imports of goods totaled $3.4 trillion, up 4%, while exports were $2.2 trillion, up 6%, leaving the goods trade deficit about 2% larger at roughly $1.24 trillion.
Import taxes are high, but lower than their peak
Average tariff rates surged on Liberation Day and afterward, once topping 21%. Goods from China were briefly subject to tariffs as high as 145%, which nearly halted imports from that country. The administration later reduced many rates and the Supreme Court removed some tariffs altogether. By February, the Tax Foundation estimated the average tariff on imports at about 10% — roughly half the peak level but about four times higher than the average before the president returned to office.
Volatility and business uncertainty
Tariff policy has been highly volatile. The Tax Foundation counted more than 50 changes to tariffs between Liberation Day and now, creating planning challenges for businesses. That volatility, combined with higher import taxes, likely contributed to sluggish job gains and slower economic growth by weighing on hiring and altering investment decisions.