Thursday 2 April 2026 marked the first anniversary of one of the most important policy moves of Donald Trump’s second presidency. In the 2025 Liberation Day Executive Order 14257 issued just over a year ago, the Trump administration completely reworked America’s tariff schedule to address what the Executive Order called the ‘extraordinary threat’ that the US trade deficit posed both to America’s economy and its national security. In the greater scheme of things, one year is not a long time. But it presents a good opportunity to offer an initial assessment of the impact of the Trump administration’s grand protectionist agenda.

Unfortunately, there is little good news to report. Not only has Liberation Day failed to achieve its economic goals, it has also damaged America’s relations with the rest of the world, including with longstanding allies. More worryingly, it suggests that the administration did not think through its strategy in seeking to fundamentally reshape America’s trade relationship with other nations. Nowhere is that more evident than when it comes to the constitutional basis – or, rather, what turned out to be the unconstitutionality – of most of the Liberation Day tariffs.

Many students of trade policy were puzzled when the administration invoked the International Emergency Economic Powers Act as the legal authority for the Liberation Day tariff increases. On one level, it underscored the administration’s longstanding belief that the size of the total US trade deficit in goods and services constitutes a serious threat to the United States and subsequently required an emergency response after decades of neglect. The political point was thus made. The administration may have also believed that the courts would be reluctant to challenge the executive branch’s authority to determine what constitutes an economic emergency. Once such authority is challenged in one realm of policy, it can be challenged in others.

Basing the Liberation Day tariffs on the International Emergency Economic Powers Act (IEEPA), however, turned out to be a serious mistake, and whoever advised the president to do so has surely lost much of their cache within the administration. No less than three courts – the US Court of International Trade, the Federal Circuit Court of Appeals, and the US Supreme Court – rejected the administration’s invocation of the IEEPA.

It is also telling that, of the 44 amici curiae briefs filed in advance of the Supreme Court hearing, just six supported the administration’s position. However, 37 were filed in support of the challengers, and one brief supported neither. Notably, many of the briefs critical of the administration’s position were prepared by organisations conventionally labelled ‘conservative’, and signed by conservative lawyers and economists.

To be clear, the courts were ruling on the constitutionality of the administration’s executive order – not the economics of tariffs, let alone the never-ending debate between protectionists and free traders. After all, the court rulings did not affect the tariffs on steel, copper and aluminium that the administration had based on Section 232 of the 1962 Trade Expansion Act.

But in curbing the administration’s use of the IEEPA for the purpose of revising the entire US tariff schedule, the judicial system did put a small dent in the executive branch’s capacity to act unilaterally on economic issues. It also reminded Congress – and the country at large – that Article I, Section 8, Clauses 1 and 3 of the US Constitution expressly grants Congress the power to lay and collect duties (tariffs) and regulate foreign commerce. That means there are implicit limits to the extent Congress can delegate such powers to the executive branch.

Therein lay the deeper significance of the US judiciary striking down the bulk of the Liberation Day tariffs. If you are a firm supporter of an expansionist conception of executive branch power in America, you cannot be happy with the courts’ rulings, whatever your views on trade. By contrast, if you believe in the separation of powers, you will be happy that the same ruling sends a subtle message to Congress that it should reassume its constitutional responsibility for an area of policy that it has been politically convenient for Senators and members of Congress to shirk for many years.

The constitutional ramifications of the judiciary disallowing most of the Liberation Day tariffs will play out over a period of years. What is more immediately apparent is the detrimental economic impact of those same tariffs on the US economy.

One longstanding critique of tariffs is that they invariably increase consumer costs, as is demonstrated by those of Liberation Day. A March 2026 study by the Tax Foundation found, for example, that the administration’s tariffs translated into an average $1,000 tax-increase for every American household in 2025. The same study projects this to grow by another $600 in 2026. While wealthy people can absorb this easily, the impact on poorer Americans – many of whom voted for Donald Trump in November 2024 – is disproportionately larger.

As for reducing the trade deficit, America’s tariff-turn since 2 April 2025, has not realised this goal. On 12 March, the Bureau of Economic Analysis reported that the total 2025 US trade deficit was $911.5 billion. That was an increase upon the 2024 figure of $903.5 billion. I happen to think that Adam Smith was right when he argued that trade deficits are not something we should worry about. The point, however, is that the Trump administration does believe the US trade deficit is a matter for concern, and that its preferred means for addressing the deficit is not producing the desired results.

Another objective of the Liberation Day tariffs was to bolster manufacturing employment. For decades, Trump has insisted that America must protect manufacturing jobs, and he believes that the aggressive use of tariffs against manufacturers based in other countries, especially China, Japan, Germany and India, is one way to realise that end. But here, too, things have not turned out the way the president hoped they would.

To be fair to the Trump administration, there has been negative net annual job growth in the US manufacturing sector since January 2023. It is also important to stress that other factors, especially technological automation and wage levels, affect manufacturing jobs. Nonetheless, despite Trump’s predictions of a tariff-induced manufacturing employment renaissance, such jobs declined from 12.662 million in April 2025 to 12.537 million in February 2026.

A closer look at different regions of the United States confirms that manufacturing in much of the country is not undergoing a resurgence. Each of the 12 regional districts of the Federal Reserve engage in regular surveys of economic conditions of the areas that they cover. Some of their more recent reports paint a gloomy picture of US manufacturing. In February 2026, for example, the Minneapolis Fed reported not only flat manufacturing productivity and production throughout its district, but also stated that ‘staff levels at regional manufacturers’ declined throughout 2025.

The worrying word that appears repeatedly in this and similar surveys in connection to the Liberation Day tariff whirlwind is ‘uncertainty’. Considering the erratic changes in US tariff rates imposed on different countries since April 2025, this is no surprise. For example, the US tariff rate applied to many Chinese products since Liberation Day has oscillated from 34 per cent to 125 per cent, to 30 percent to 10 percent. These shifts also don’t reflect the numerous exemptions and endless alterations in tariff rates applied by the United States to specific imported goods.

The reasons for these wild variations in tariffs on imports from China and other countries are several. They range from the effects of court decisions to the waves of tariff suspensions and retaliations announced by the Trump administration at irregular intervals. Further complicating matters have been one-offs such as the Trump administration threatening tariff hikes to coerce European nations into supporting an American appropriation of Greenland.

You need only spend five minutes talking to any executive in a US-based firm that imports goods from abroad to discover just how much all this tariff ping-pong negatively affects them, not least by making it much harder for American companies to plan ahead. Deciding what wages you can pay your workers, or from which country you will import goods, or how much capital you can afford to invest, becomes considerably more difficult when the price of imported goods constantly vacillate because of tariff-rate instabilities.

There is always some degree of uncertainty in economic life. Entrepreneurial innovation and discovery, especially in as entrepreneurial an economy as that of the United States, is constantly upending the status quo in most sectors of the economy. Indeed, without such disruption, economies will stagnate.

But just as there are known unknowns and unknown unknowns, there are also certain uncertainties and uncertain uncertainties. The type of uncertainty associated with the endless alterations in tariff rates that have followed Liberation Day is not appreciated by any of the thousands of American businesses that rely in some way upon imports to make better quality products, realise greater efficiencies, and, ultimately, reduce their prices.

In public, senior administration officials seem to be in denial of the ongoing damage to the US economy caused by the twists and turns in Trump’s pursuit of his trade agenda. Economic damage is not, however, the only thing about post-April 2025 US trade policy that appears to be escaping the attention of the Trump administration. The consequences for US relations with other countries have been equally harmful.

Trade policy is always enmeshed in foreign policy and national security issues. When one nation raises its tariff rates on imports from another country, the latter is bound to take a dimmer view of the former. Some countries may even retaliate. Rarely, however, do such actions introduce deep fractures into longstanding relationships between countries, particularly if they are military allies.

The making of trade agreements is a long and complicated process. But one reason for trade agreements is to create a stable framework that permits people from two or more nations to trade with some confidence that the rules governing these exchanges – including agreed-upon tariff-rates – won’t be constantly, abruptly and unilaterally altered. Certainly, minor modifications to the details of trade agreements are made via regularly scheduled negotiations. Such changes, however, have little in common with the endless tariff pauses, hikes, reductions, and retaliations that have been pronounced by the Trump administration in sharp and irregular bursts since April 2025.

When a US president pursues a trade policy in which instability is a feature rather than a bug, many nations will begin wondering about America’s reliability as a long-term trade partner. Such doubts have a way of seeping over into security questions. Indeed, there is considerable evidence that the Trump administration’s ever-shifting trade measures have substantially corroded the trust that underpins the alliances that help America project its power around the globe.

Tariffs aren’t the sole reason why the leaders of several European governments and countries like Canada are now speaking of strategic realignments away from America, but they are part of the picture. There is little prospect of any of these nations entering into formal alliances with US geopolitical rivals like China. Nor are longstanding US alliances heading inexorably toward a rupture. But there is little question that some EU nations and Canada are seeking to forge new security arrangements that are independent of the existing arrangements that these nations have with the United States. That necessarily implies a certain distancing of these countries from America. It is unclear, at best, how such disaffection serves long-term US interests. All countries need allies, even the United States.

There are many reasons why some European nations are declining to assist America in its present military action against the Iranian regime. Most such reasons have little to do with the Trump administration’s trade policies since Liberation Day. Nevertheless, the erratic and at times belligerent tariff measures taken by the United States against the EU and European nations over the past year have surely contributed to some European governments’ reluctance to support the US action, making them far more reticent than they otherwise might have been.

It may well be that the turmoil introduced into international trade by the Liberation Day tariffs – and, more importantly, the mindset they represent – will start to subside when the second Trump administration’s term of office ends on 20 January 2029. That, however, is just under three years away. Should the present trajectory in US trade policy continue, so, too, will the self-inflicted damage to the US economy and other nations’ trust in America.

Therein lies the irony of the tariff maelstrom let loose one year ago. The Trump administration’s protectionist agenda has not ‘protected’ Americans. On the contrary, it has raised prices for consumers, increased costs for American businesses, failed to realise some of its stated economic goals, and diminished confidence that the United States can be trusted to fulfil its promises more generally. Put simply, Trump’s tariffs have not put America first.