In my latest column for AIER, I offer data that debunk Trump’s boast that the tariffs he imposed in 2025 fueled a “stunning economic turnaround, the biggest in history.” Trump’s boast is demonstrably false.
Specifically, I compare the U.S. economy’s performance during the first 365 days of Trump 2.0 (a year filled with enormous tariff hikes) to the U.S. economy’s performance during the first 365 days of Trump 1.0 (a year with no tariff hikes, or even specific announcements of such hikes).
I am, however, under no delusions that Trump’s cheerleaders will credit these data. The president’s cheerleaders will continue to insist dogmatically that, if Trump says it, it must be true. The belief seems to be that Trump’s saying X is itself proof of X’s accuracy. And furthermore, the data that I report here are reported by what I am often told is an elitist, out-of-touch, brainwashed, “globalist” college professor who doesn’t know what time it is. Anyway…. here are three slices from my column.
In his State of the Union address earlier this year, President Trump boasted that “one of the primary reasons for our country’s stunning economic turnaround, the biggest in history, where the Dow Jones broke 50,000, four years ahead of schedule, and the S&P hit 7000 where it wasn’t supposed to do it for many years, were tariffs.”
The facts tell a different story. First, because there is no schedule for stock-market gains, it is meaningless to say that the Dow Jones or S&P 500 rose “ahead of schedule.” The reality is that the US economy during the first year of President Trump’s second term simply did not perform a “turnaround,” much less one that could be ranked as “the biggest in history.”
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Let’s begin by looking at the performance of the three major US financial-market indices: the Dow Jones Industrial Average (DJIA), the S&P 500 index, and the NASDAQ index. These indices are especially telling because they reflect the expectations of people investing their own money. These investors have strong incentives to take account of as much available information as is worthwhile, and not to be misled by political bluster or by reality-distorting hopes and fears.
In the year from January 20, 2017 (the day Mr. Trump was first inaugurated) through January 20, 2018 (two days before the announcement of Mr. Trump’s first tariffs), the DJIA rose by a stunning 31.5 percent. In the corresponding period of Mr. Trump’s second term — January 20, 2025, through January 20, 2026 — the DJIA rose by 11.5 percent. This latter rise in the DJIA is impressive, to be sure, but it’s just over a third of the size of the rise in this index during the first year of Mr. Trump’s first term.
Like the DJIA, both the S&P 500 and the NASDAQ rose by less in the year following Mr. Trump’s second inauguration than they rose in the year following Mr. Trump’s first inauguration. Specifically, during the first year of Trump 1.0, the S&P rose by 24.1 percent and the NASDAQ by 32.1 percent, while during the first year of Trump 2.0, the S&P rose by 13.3 percent and the NASDAQ by 17.0 percent.
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Two of the most familiar economic gauges are the unemployment rate and the inflation rate. Each of these measures, alas, performed worse during the first year of Trump 2.0 than during the first year of Trump 1.0. Between January 2017 and January 2018, the unemployment rate dropped from 4.7 percent to 4.0 percent, yet between January 2025 and January 2026, this rate rose from 4.0 percent to 4.3 percent. Total nonfarm employment, from January 2017 through January 2018, rose by 1.4 percent, but from January 2025 through January 2026, it rose only by an anemic 0.2 percent.
And although the fall in the rate of inflation was a bit steeper during the first year of Trump 2.0 than during the first year of Trump 1.0 — declining from an annual rate of 3.0 percent in January 2025 to 2.4 percent in January 2026 — in January 2026 inflation was still running at an annual rate higher than the annual rate of 2.1 percent that prevailed in January 2018.
