A year and a day ago, President Trump announced that he would enact, without a vote of Congress, higher tariffs across a wide range of countries. I had been thinking about compiling a range of evidence on what has happened, but was delighted to find that Scott Lincicome, Alfredo Carrillo Obregon, and Chad Smitson have done it for me in “One Year After `Liberation Day’: Here’s What We Know and What We Don’t” (Cato at Liberty blog, April 2, 2026). For example:
“The `reciprocal” tariffs were explicitly imposed to reduce the US trade deficit, but it reached an all-time high (in real terms) last year.” As I wrote a couple of months ago, “Trump’s Tariffs Have Not Shifted the Trade Deficit.”
“Manufacturing jobs did not boom and, in fact, kept declining. Manufacturers reported throughout 2025 that tariff-induced cost pressures and uncertainty hampered economic activity in the sector, and employment data suggest that this also contributed to a slowdown in hiring.” As I’ve tried to point out in the past, many US companies are “The Import-So-That-They-Can-Export Firms”–thus, when tariffs make imports more expensive, a number of US companies that rely on imported inputs find it more difficult to compete in world markets.
“Foreign investment did not boom. Despite the president’s Liberation Day prediction of a boom in foreign direct investment (FDI), quarterly FDI has fallen since April 2025, with the US registering $72.49 billion in FDI in Q4 (Figure 9). Total FDI in 2025 was $288.4 billion, lower than the annual totals from 2021 through 2024, and far short of the rate needed to reach the president’s lofty goal of $18 trillion in investment. New FDI last year was even lower. Several firms and countries have pledged to increase their investments in the US, but such pledges do not show up in data.” Lots of countries have promised to make big investments in the US economy–indeed, they have often promised to make investments much larger than their existing total current investment in the US. Such promises are cheaply made. It is of course unsurprising that imposing tariffs on needed inputs and erratically changing the tariff schedules for different countries and goods is not a way to make the US economy appear like a favorable destination for foreign investment.
“Tariffs raised prices.” The Cato authors link to a number of studies. The actual effective tariffs have turned out to be about 10% on average for imports as a whole, and imports are about 14% of the US economy. The result has been a real if modest boost in prices, as I tried to point out in “Tariffs and Inflation: Where Are We?”
“Contrary to the president’s early claims that there would be no exemptions from his global tariff regime, numerous product exemptions were issued throughout 2025. … Moreover, 43 percent of US imports avoided all tariffs imposed in 2025, including the reciprocal tariffs. As many as 64 percent of US imports (based on 2025 values) are now exempt from the replacement Section 122 tariffs, which retain most of the reciprocal tariffs’ exemptions. Most notable among the exemptions is, as economist Joey Politano first noticed last year, semiconductors, computers, and related goods that the booming US artificial intelligence industry needs. The loopholes help to explain why the tariffs were not as costly as many experts feared in April 2025.”
With tariffs being announced and unannounced, coming and going, and exemptions openig and closing, “tariff-related lobbying activity—driven by the chance to win an exemption or new restrictions on overseas competitors’ goods—reached levels not seen in years, if not decades. The number of registered clients for tariff-related lobbying increased by 218 percent in 2025 with respect to the previous year, the biggest year-on-year change since Trump’s first term in 2018. Meanwhile, trade-related lobbying expenditures reached more than $900 million in the first half of 2025 alone and were 28 percent higher than in the first half of 2024.” Meanwhile, many firms are filing lawsuits to recover the tariffs they already paid, now that the US Supreme Court has ruled that President Trump lacked legal authority to impose many of them.
As the US has opted out of world trade markets, other countries are building trade ties with each other. The US is not involved in these trade talks, and thus has no influence over how they evolve, or how the trade talks might be shaped for the benefit of US exporters. The authors write: “The US has not negotiated any free trade agreements (FTAs) since 2020, and since then, other countries—including some of America’s largest trading partners and long-standing allies—have negotiated and entered into many such deals . In just the last few months, for example, the EU has inked traditional trade deals with MERCOSUR, India, and Australia; Canada has launched negotiations with Thailand and the Philippines and is working on an FTA with ASEAN; China inked agreements with ASEAN and Congo, and is updating its FTA with South Korea; and even India, which had long been skeptic of FTAs, reached agreements with the United Kingdom and New Zealand.”
Given that the US has surrendered any pretense of global leadership on trade policy, and that the US economy has not in fact been transformed in the past year, some defenders of the tariffs now claim that everyone knew all along that the real and benefits of tariffs would take years to emerge. Maybe they will eventually turn out to be correct. Next year, or the year after, or the year after, we will se. But pointing to expanding US industries like semiconductor manufacturing that are propped up by government subsidies and using inputs that are exempt from US tariffs is hardly evidence that the tariffs are having beneficial effects. The boom in US investment in data centers is not because of tariffs, either. In terms of expecations how quickly tariffs would benefit the US economy, worth remembering what President Trump actually said when announcing the tariffs a year ago:
My fellow Americans, this is “liberation day.” Been waiting a long time. April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again. Going to make it wealthy-good and wealthy. For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike. … Our country and its taxpayers have been ripped off for more than 50 years, but it is not going to happen anymore. It’s not going to happen.In a few moments, I will sign a historic Executive order instituting reciprocal tariffs on countries throughout the world. … This is one of the most important days, in my opinion, in American history. It’s our declaration of economic independence.For years, hard-working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense. But now it’s our turn to prosper and, in so doing, use trillions and trillions of dollars to reduce our taxes and pay down our national debt. And it will all happen very quickly.With today’s action, we are finally going to be able to make America great again, greater than ever before. Jobs and factories will come roaring back into our country, and you it happening already.We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers. And ultimately, more production at home will mean stronger competition and lower prices for consumers. This will be, indeed, the golden age of America.
In short, if you wish to argue that critics are unrealistic in expecting Trump’s tariffs to have large effects “very quickly,” so that “jobs and factories would come roaring back into our country,” you might remember who took the lead in setting such unrealistic expectations.
