Trump’s tariffs have done ‘significant damage’ to US economy, top financial group warns
Over a year has passed since President Donald Trump’s “Liberation Day,” when he rolled out a sweeping tariff regime, imposing steep duties on most foreign imports and fundamentally reshaping U.S. trade policy.
Now, the numbers speak for themselves, and they're deeply troubling, according to Mark Zandi, chief economist at Moody’s Analytics, an arm of the long‑established global risk‑assessment group.
“We have a year’s worth of economic data since Liberation Day,” Zandi wrote Monday. “The data are definitive; the tariffs have done significant damage to the economy.”
The leading economist highlighted figures on inflation and employment growth, both of which have been exacerbated by the ongoing Iran war.
- U.S. Employment: “Job growth has come to a standstill, with only the non-traded healthcare industry adding meaningfully to payrolls,” Zandi wrote, referring to the 693,000 domestic health care jobs added last year — without which there would have been a net hiring loss. In total, employers added an average of just 9,700 jobs per month last year, the weakest hiring since 2002, outside of recession years.
open image in gallery- U.S. Inflation: “Inflation has accelerated, with the consumer expenditure deflator increasing at a 3% year-over-year pace, up from 2.5% before the tariffs and well above the Federal Reserve’s target of 2%,” Zandi wrote.
- U.S.-Iran war: Outlooks for job growth and inflation remain bleak as the war has caused oil prices to soar. Moody’s chief economist noted: “The higher energy and other commodity prices caused by the war threaten to do even more economic damage than the tariffs, further undermining growth and pushing inflation higher. The U.S. economy is resilient, but just how resilient is set to be tested.”
Trump’s tariffs, the cornerstone of his economic agenda, were first implemented last April, when he announced a blanket 10 percent levy on most of the world, in addition to higher country-specific duties.
They have generated billions in revenue — $195 billion in fiscal year 2025 alone — a result that Treasury Secretary Scott Bessent has pointed to as a positive step toward lowering the federal deficit. U.S. national debt is now higher than GDP, hitting levels not seen since the aftermath of World War II.
open image in galleryWhat’s more, the cost of tariffs is being borne by Americans. U.S. consumers have paid for “nearly all” of the tariffs, according to a January report from the Kiel Institute for the World Economy. A February report from the Tax Foundation found that the president’s levies will cost the average household $1,300 more this year.
Multiple polls have indicated the president’s levies are deeply unpopular, including a March survey commissioned by The Guardian, which found 7 in 10 Americans believe the tariffs have cost them more.
Facing widespread pushback, Trump has repeatedly paused, revised or walked back numerous duties, including on coffee, beef and other foodstuffs. Detractors across the media, Wall Street and beyond have branded the president's tariff retreats as "TACO" — Trump Always Chickens Out.
The president’s tariff regime hit its biggest snag in February, when the Supreme Court ruled that he had exceeded his authority by using the International Emergency Economic Powers Act of 1977 to impose duties.
In response, Trump criticized the justices, calling their ruling “deeply disappointing.” He later said he would pursue a global 10 percent tariff under a law limiting such measures to 150 days, while continuing to advance his trade agenda through other avenues.
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