Tracking The Cost Of Trump’s Tariff War – OpEd

In the next few weeks, the US Supreme Court ruling on the legality of the Trump administration's tariff war against the world is likely to be made  known. The case, centering on whether the President has the authority under the International Emergency Economic Powers Act (IEEPA) of 1977 to bypass Congress and impose sweeping "reciprocal" or "universal" tariffs, will really not be of any consequence in the world of geopolitics and international relations conducted by the US administration.

Although observers note that the justices appeared largely skeptical of the administration's broad use of IEEPA to levy duties, a power typically reserved for Congress under the Taxing and Spending Clause, it is unlikely that the current court of not so independent judicial minds, with its conservative majority beholden to President Trump and his administration - will defy or embarrass him with judgment on an issue that undercuts or undermines the current American policy on international trade and commerce.

The Court is currently in winter recess. The next scheduled session is February 20, 2026, which is a potential date for the release of the opinion.  Even if the Supreme Court invalidates the IEEPA-based tariffs, the administration has signaled its ability to shift to other legal frameworks to maintain its trade policy. These include those related to national security, unfair trade practices and balance of payments authority which comprise a virtually unbeatable arsenal for the administration.

Hence, expect no change in US tariff policy whoever and whatever the opposition is within the States. The pivotal players are its initiators and framers - Trump (tariffs is the “most beautiful word “ and “make us rich as hell”) and his team of Scott Bessent, ​Jamieson Greer, Howard Lutnick and Robert Lighthizer. They view tariffs not as a tax but as a primary negotiating tool for geopolitical leverage and domestic manufacturing revival.

Costs For The US

Tracking the success or cost of the trade war requires monitoring specific economic data points that the administration uses to justify its position.  As we move into 2026, various indicators suggest that the sweeping tariff policies have encountered significant friction. 

While the administration points to increased federal revenue and a robust stock market, critics and non-partisan data highlight several areas where the trade war has backfired or failed to meet its primary objectives.

​Widening Trade Deficit

​A primary goal of the tariffs was to reduce the US trade deficit. However, 2025 data shows the opposite occurred. In the first three quarters of 2025, the trade deficit rose to nearly $840 billion, a 4% increase over the same period in 2024.  

​Much of this was driven by American companies "front-loading" or rushing to import goods before new tariff deadlines took effect. 

Early 2026 data shows a modest narrowing of the annual goods deficit with Europe, China, and Mexico, though the overall deficit remains large as trade shifts to other regions (like ASEAN). Should this trend continue, Democrats will be focusing on this as a primary indicator of the tariff war failure. 

​Consumer Price Inflation

This indicator is likely to take centre stage in the midterm elections. ​Tariffs are effectively taxes on importers, and indicators show these costs have been passed down to households. Estimates for 2026 suggest the average US household will face an additional tax burden of roughly $1,300 due to higher prices. With core consumer goods prices spiking, prices for specific categories have surged. Prices for leather products (shoes, handbags) rose by up to 36%, apparel by 34%, and motor vehicles by an average of $5,700 per new car.  

​Persistent Inflation

Another concern for the administration is that overall inflation has remained high. Economists note that tariffs added approximately 0.75 percentage points to the inflation rate that would not have otherwise existed.

​Impact on Growth and Employment

​Despite the administration's goal of sparking a manufacturing "miracle," the broader macroeconomic data suggests a cooling effect. Strong arm tactics to compel other countries including key allies to invest in the US to create manufacturing jobs may work to some extent but this will take years not months to materialise. Tariff induced job gains for now remains largely on paper. These ‘jobs’ are likely to disappear once Trump is no longer around or in power. 

Costs for Developing Countries 

The ripple effects of the MAGA tariff policies have significantly strained the economies of developing nations, especially smaller and less "leveraged" ones. 

The adverse effects on these countries can be broken down into various key categories:

​Producers

​For many developing nations, the US is the primary destination for their exports. The sudden imposition of high "reciprocal" tariffs has disrupted these vital trade links. Manufacturers in over 70 countries reportedly halted shipments to the U.S. in early 2025 due to prohibitive costs. Specific categories like wool sweaters (169% tariff) and toys (145% tariff) have devastated specialized manufacturing hubs in Southeast Asia and South America.  

​Sector-Specific Hits

Countries reliant on a narrow range of exports—such as textile producers in Bangladesh and Vietnam or steel exporters in South Africa—have seen orders dry up as US importers shift to domestic sources or "friendly" nations with exemptions.

​Small and Medium Enterprises (SMEs)

Unlike large multinationals, SMEs in developing nations lack the capital to pivot to new markets. In sub-Saharan Africa, over 60% of SMEs have reported supply chain delays and reduced access to the US market, leading to significant job losses.  ASEAN countries have yet to total up the cost of the tariff war. When they do, it is likely that the region's small producers will be found to have taken the biggest hit. 

SMEs typically operate on thinner margins and have less capital so that the prevailing 19% tariff often exceeds their total profit margin. Many SMEs have had to choose between raising prices (risking lost US contracts) or absorbing the cost and operating at a loss.

​Consumers

​While the tariffs are US taxes, their impact on global supply chains creates imported inflation for consumers in developing nations. Many developing countries rely on the US - sourced high-tech components, specialized machinery, or agricultural products. Retaliatory measures and global price hikes have made these essential goods more expensive for non American consumers.

​Structural Damage to the Global South

​Economists at UNCTAD and the World Bank have highlighted a fragmentation of the global trading system that disproportionately hurts the most vulnerable. Estimates suggest that geopolitical trade fragmentation could cost African nations up to 4% of their total GDP over the next decade.  

Has the U.S. Hurt Itself Most Of All 

Perhaps the most ironic feature of Trump's tariff war, apart from its double edged impact on American consumers, is how a policy designed to isolate China and bolster "America First" has, in several key ways, backfired by pushing other nations closer to Beijing - geopolitically and economically. While the tariffs were initially intended to punish China, the global fallout has created more than a vacuum. When nations - including many staunch US allies - felt the squeeze of American protectionism, they didn't hunker down; they looked for new economic oxygen, and this is mainly coming from China. 

Trump may just be the most significant catalyst to a new world economic order in a way he will regret.