After a year of Trump, who are the winners and losers from US tariffs?
During the 2024 presidential campaign, Donald Trump promised to ease economic pressures on households and restore US economic strength. Central to that promise was the claim that tariffs would revive manufacturing and rebalance trade in America’s favour. Once in office, the second administration quickly made trade policy – especially tariffs – a central pillar of its economic agenda.
The introduction of a sweeping tariff regime on April 2, framed as “reciprocal tariffs”, became the signature economic intervention of the administration’s first year in power – and it appears we have not heard the last of it.
The tariffs were not a single event but a sequence of trade actions launched immediately after Trump’s inauguration. In January, the administration announced the “America first” trade policy. This prioritised reductions in the US trade deficit to revitalise domestic manufacturing and promised tougher economic relations with China. Sector and country-specific tariffs followed.
While Trump’s so-called “liberation day” in April set the stage as he announced a range of tariffs to levy against various countries with which the US was running a trade deficit, the implementation was delayed until August, creating prolonged uncertainty for firms and trading partners.
The tariff regime pursued three objectives: raising government revenue, reducing the US trade deficit, and compelling changes in China’s trade behaviour. But one year into Trump’s second term, has this strategy worked?
What worked
On revenue, the policy has delivered. Customs revenue rose sharply by US$287 billion (£213 billion), generating additional fiscal revenue outside the normal congressional appropriations process. In headline terms, the tariffs achieved what they were designed to do: they raised money – but mainly (96%) from American buyers.
Progress on the trade balance (exports minus imports) has been far less convincing. Despite a modest depreciation of the US dollar and stronger export growth during much of 2025, the total US trade balance (goods and services) fell by US$69 billion. While the deficit on the goods trade balance (without services) at times narrowed, there is no evidence that this will be a sustained trend.
Addressing the trade imbalance with China is at the core of the Trump’s tariff strategy. According to trade data from the US Department of Commerce, during the first ten months of 2025, US imports from China declined by 27% – the largest of all US trading partners bilateral decline observed. Tariffs on Chinese products were imposed immediately, without the transition periods granted to most other trading partners. On paper, this aligns with the administration’s objective of curbing Chinese market access.
But this contraction must be placed in context. US imports from China had already fallen by 19% between 2022 and 2024 amid rising geopolitical tensions and earlier trade restrictions. More importantly, China continues to post large global trade surpluses and has diversified both its export destinations and its product composition, reducing reliance on the US.
Rather than weakening China’s trade position, the tariff regime has accelerated supply-chain reconfiguration, as trade is now being trans-shipped through other countries before arriving in the US. Additionally, China has also increased trade with other countries that has replaced the reduction in US-China trade.
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As imports from China fell, US trade diversification intensified due to the uneven application of tariffs across countries. US imports from Vietnam increased by 40% and Taiwan by 61%, while imports from Mexico grew modestly by 5%. Imports from Canada declined, largely reflecting lower oil prices rather than tariff exposure. Overall, several economies increased their share of US imports, pointing to a reshuffling of suppliers rather than a reduction in US import dependence.
What did not work
The uneven rollout of the tariffs, coupled with limited data available through October 2025, complicates assessment of its impact. It is also possible that the January 2025 tariff announcements prompted US firms to bring forward imports ahead of the August implementation date, temporarily distorting trade patterns.
Nonetheless, the domestic price effects are clearer.
Evidence suggests tariff costs have largely been passed through to wholesale and retail prices, contributing to higher consumer prices of everyday goods rather than easing inflationary pressures.
Manufacturing output rose by a meagre 1% in 2025, a muted response given the scale of protection introduced. Industrial growth has also been held back by labour shortages caused by tighter immigration rules, even with strong trade protection in place.
Development impacts
Some of the significant unintended impacts of the tariff regime have been felt beyond the US. Analysis by London-based thinktank ODI Global highlights the extreme vulnerability of low- and middle-income countries caught in the crossfire with high export dependence, lack of other trade partners, and constrained fiscal space.
Combined with cuts to international aid, US higher tariffs could reduce export earnings for many of these countries by up to US$89 billion annually – about 0.7% of GDP on average. In effect, the cost of US protection has been pushed onto other countries.
Beyond this combined exposure of aid cuts and tariff increases, least developed countries (LDCs) face other economic risks. The tariffs were based on bilateral US trade deficits rather than the ability of partner countries to adapt to changes in US tariff policy. This design penalised economies that were highly dependent on the US market, and relied on labour-intensive manufacturing sectors such as clothing and footwear for employment and foreign exchange.
Women make up a large share of workforce in these sectors and have been hit harder than men by the tariff measures. The tariff shocks transmitted quickly through reduced orders, factory closures, and unemployment, despite the absence of strategic intent to target these economies.
Looking ahead
This tariff experiment now rests in the hands of the US supreme court, with a ruling expected within days. If the reciprocal tariffs are overturned, other options remain available, including a flat 10% tariff on most countries. Under Section 122 of the 1974 Trade Act, tariffs against trade imbalances could be imposed, but only up to 15% and for a maximum of 150 days.
At the same time, the administration has signalled potential new tariffs linked to geopolitical disputes, such as Greenland. This raises the risk of widening trade conflicts.
One year on, China’s global trade position remains resilient and US trade balances show no sustained improvement. Instead, the costs of adjustment have been unevenly distributed across countries, sectors and households. In short, the tariffs may not have made America any greater, but have certainly created economic hardship for others.
Bernardo Arce Fernandez, ODI's research officer, assisted with the research for this article.
Jodie Keane and Prachi Agarwal do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.