President Donald Trump’s sweeping tariffs on over 60 countries and the European Union kicked in just after midnight Thursday, unleashing a high-stakes trade policy that’s already rattling the U.S. economy. Trump, ever optimistic, declared Wednesday, “We’re taking in hundreds of billions in tariffs, and the growth will be historic.” Yet, with no precise revenue projections—he admitted, “We don’t even know the final number”—businesses and economists are grappling with uncertainty.
The administration insists these tariffs will spark investment and hiring, positioning the U.S. as a manufacturing powerhouse, but early data paints a grim picture of stalled hiring, rising inflation, and declining home values since the initial tariff rollout in April. John Silvia, CEO of Dynamic Economic Strategy, notes that April’s tariffs triggered market volatility and a hiring slowdown. “A less productive economy needs fewer workers,” he wrote, adding that higher tariff prices erode real wages, forcing firms to cut costs. Inflation has climbed 3.2% year-over-year through June, per the Bureau of Labor Statistics, outpacing wage growth for many.
Housing markets in places like California and Florida have seen median home values drop up to 4% since spring, as borrowing costs rise and consumer confidence falters. The trade deficit, a key target of Trump’s policy, has ballooned to $582.7 billion in the first half of 2025—a 38% surge from 2024—as importers front-loaded shipments to dodge taxes. Construction spending has fallen 2.9% over the past year, and manufacturing jobs, promised as a tariff benefit, are down 1.1% since January, per Labor Department data.
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The rollout has been chaotic, with Trump’s team delaying the tariffs from August 1 via a vague July 31 order, leaving trading partners like the EU and Japan unsure if taxes would start Thursday or Friday. Even Kevin Hassett of the National Economic Council seemed unclear, deferring to the U.S. Trade Representative’s Office. Trump further muddied the waters by slapping a 25% tariff on India for its Russian oil purchases, pushing their total import taxes to 50%, and signaling upcoming tariffs on pharmaceuticals and a 100% tax on computer chips, leaving industries in limbo.
Georgetown University’s Brad Jensen warns, “These tariffs aren’t an explosion—they’re sand in the gears, grinding things to a halt.” Trump’s use of a 1977 law to declare an economic emergency for the tariffs faces legal challenges, with a recent U.S. appeals court hearing potentially forcing the administration to find new justifications. Former House Speaker Paul Ryan, a Trump critic, called the policy “whimsical,” warning of “choppy waters” due to likely legal battles.
Despite this, Wall Street has held firm, with the S&P 500 up 25% since its April low, buoyed by Trump’s July 4 tax and spending package. The White House sees this as proof of economic strength, but economists like Rachel West of The Century Foundation caution that the benefits may be fleeting. “The stock market isn’t the economy,” West said. “Ordinary Americans are already feeling the pinch.”
Globally, the tariffs risk straining alliances, with the EU threatening retaliation on U.S. exports like agriculture and automobiles, and Japan and South Korea eyeing World Trade Organization complaints. Domestically, a National Retail Federation survey estimates tariffs could raise household costs by $1,200-$1,800 annually, hitting lower-income families hardest. Trump remains undeterred, framing the tariffs as a bold move to restore U.S. dominance, but as the policy unfolds, the world and American voters watch nervously. “Trump can afford to be cavalier,” West said. “The rest of America is paying the price.”
Also Read: Trump’s Tariffs Ignite Global Trade War, Threaten US Economic Stability