THE IMPACT OF TRUMP’S TARIFFS ON THE AMERICAN ECONOMY: ANALYSIS OF THE CONSEQUENCES OF PROTECTIONIST POLICY ON ECONOMIC GROWTH, EMPLOYMENT AND SECTORAL STRUCTURE OF THE USA

Abstract

The trade policy of President Donald Trump (2017-2021, 2025-present), characterized by extensive tariff imposition on imports, represents the most significant change in U.S. trade practices since the Smoot-Hawley Tariff Act of the 1930s (Wikipedia Contributors, 2025). This paper analyzes the comprehensive impact of Trump›s tariffs on the American economy through three key dimensions: macroeconomic effects on GDP and inflation, microeconomic consequences on sectoral productivity and employment, and long-term structural changes in trade relations. The research is based on empirical data from the period 2018- 2025 and shows that tariffs, despite the goal of increasing domestic production and employment, resulted in net negative economic effects. The average tariff rate rose from 2.5% at the beginning of 2025 to 27% by April of the same year, representing the highest level in the last hundred years (Wikipedia Contributors, 2025). The analysis indicates that tariff costs were entirely passed on to American importers and consumers, leading to price increases and reduced economic efficiency (Tax Foundation, 2025). GDP contracted by 0.3% on an annual basis in the first quarter of 2025, while retaliatory tariffs by trading partners further damaged export sectors, especially agriculture (Kolb, 2025). The research concludes that protectionist trade policy, without complementary structural reforms, does not contribute to sustainable economic growth or increased competitiveness of the American economy.