It was supposed to be economic Armageddon.
That, at least, was the loud warning from academics, pundits, and many in the financial press.
Tariffs, they said, would torch the American consumer, spike inflation, and crater confidence.
Especially those tariffs President Donald Trump instituted on April 2 — Liberation Day.
Instead, something else happened: nothing of the sort.
CPI beats on overall and “core” in May! The money supply has been flat since 2022…that’s why inflation data has been so subdued. Tariffs don’t cause inflation, excess money printing does. pic.twitter.com/CLa4NNBNhG
— Brian Wesbury (@wesbury) June 11, 2025
Far from igniting the inflationary firestorm predicted by his critics, Trump’s sweeping tariffs — including a 10% universal import duty and targeted hikes on 90 nations — have coincided with the lowest inflation rate since early 2021.
In a striking reversal of the narrative pushed by many economists, The Economist—a publication not known for its support of Trump’s policies — published a June 5 article acknowledging the muted inflationary effect of the tariff wave. The magazine pointed to hard data: in April, year-over-year inflation cooled to just 2.3%, far below the 0.8-point spike predicted by a University of Chicago survey of 48 economists.
Instead of tariff-fueled price hikes, the Bureau of Labor Statistics showed that prices for heavily impacted goods like clothing and new cars actually declined.
Car prices dropped by 0.5% from March to April, despite 25% tariffs on auto imports going into effect on April 3. Clothing prices remained flat through March — even as progressive economists sounded alarms. Far from passing on costs, many retailers and foreign producers appeared to absorb them, underscoring the competitive nature of global commerce in a post-pandemic landscape.
Even groceries — arguably the most politically sensitive prices of all — held steady through May, despite new duties on Canadian produce and other perishables. Consumers, in short, weren’t being punished at the checkout line.
Of course, none of this was supposed to happen.
The prevailing wisdom in elite economic circles was that tariffs were blunt-force tools unfit for a modern economy.
But Trump, ever the iconoclast, pursued them not merely as protectionism but as part of a larger strategy: restore domestic manufacturing, reduce reliance on adversarial nations, and close the yawning trade deficit.
On that final point, results are already materializing. In April, the U.S. goods trade deficit dropped 46% from March levels, an almost unbelievable $74.6 billion cut. Importers rushed to bring goods ashore immediately after Trump's election, then pared back demand from Liberation Day onward. By June, the trade gap had fallen to a $900 billion annualized rate — down from $1.2 trillion in 2024. The trend is unmistakable: America is importing less and producing more.
Supporting this shift, U.S. manufacturing output rose 3% year-over-year in May, according to the Federal Reserve. Higher tariffs on steel and aluminum — some reaching 50% — have given domestic producers breathing room to grow. These are the kind of real-world gains that tariff critics said would never happen, or that would come at the expense of price stability.
They were wrong on both counts. Even The Economist, long a bastion of globalist trade orthodoxy, was forced to concede that the impact of tariffs on consumer prices has been minimal. Analyzing Bureau of Labor Statistics data, the magazine reported that tariffed import prices rose just 0.2% overall since April — far below the dire predictions of 1%–2% surges.
Consumer sentiment, too, has defied the gloomy forecasts. While the Conference Board’s confidence index dipped from pre-tariff highs, it stabilized at 65 in June—far from the collapse many on the left predicted . Americans appear to be adjusting, not panicking.
Of course, The Economist was careful to add a caveat: the long-term effects of tariffs may still surface as supply chains adapt. That’s fair. But thus far, the data tell a different story — one of stability, resilience, and unexpected upside.
In hindsight, much of the panic over Trump’s tariffs seems less about economics and more about ideology. The idea that America could — or should — rethink the gospel of free trade was heresy in elite circles. But Trump has never sought their approval. His playbook was written with the American worker in mind, not the approval of Davos or academia.
As the trade deficit narrows and the factory floors hum a little louder, it’s increasingly clear: this was no reckless gamble. It was strategy. And it’s working.
While some still mutter darkly about future price spikes, the facts on the ground are sobering — and for Trump’s critics, humbling. Inflation remains tame, shelves are stocked, and voters aren’t paying more to put dinner on the table. The tariffs are not only holding; they’re delivering.
Dr. Joseph Ford Cotto hosts and produces News Sight, speaking the data-driven truth about economic and political issues that impact you. During the 2024 presidential election, he created the Five-Point Forecast, which correctly predicted Trump's national victory and the outcome in all swing states. The author of numerous nonfiction books, Cotto holds a doctorate in business administration and is a Lean Six Sigma Certified Black Belt. During 2014, HLM King Kigeli V of Rwanda bestowed a hereditary knighthood upon him. It was followed by a barony the next year.
Image: X screen shot