Is it true? And how is the promised “revival of America’s greatness” going overall? – asks the BBC.
“Under my leadership, we are experiencing an unprecedented economic boom,” Trump summarized the first year of his administration, speaking in Iowa this week. – Inflation has been halted, incomes are up, prices are down. The economy is booming. The working class is thriving. We are going from victory to victory like never before.”
Meanwhile, many Americans have a different opinion. According to a January poll, 60% are dissatisfied with Trump’s handling of inflation, 57% disapprove of his trade tariff war with the rest of the world, and 51% generally disagree with Trump’s economic policies, with 42% strongly disagreeing.
Economists have even sadder assessments.
“There is no boom. And by a number of indicators, the economy is far worse than the one Trump inherited from Joe Biden,” says Paul Krugman, a Nobel laureate and longtime Trump critic.
Who’s right? Below are 10 of Trump’s top 10 statements about the economic success of his second term, along with statistics and commentary from economists to help answer that question.
1. America is experiencing an unprecedented economic boom
“Under my leadership, we are experiencing an unprecedented economic boom. This has never happened before,” Trump said in Iowa.
The World Bank estimates the U.S. economy will add 2.1% in 2025 and continue to grow at about 2% over the next two years. Under Joe Biden, growth was higher: +2.8% in 2024 and +2.9% in 2023.
Economists expected a slowdown due to Trump’s tariff war, his attacks on the Central Bank, migrants, and the federal government. However, in reality, many of Trump’s threats did not make it beyond social media, and tariffs came in well below expectations.
The growth is compelling, but the economy is not advancing broadly across the front, but narrowly – thanks in large part to giant investments by major companies like Microsoft, Amazon and Google in artificial intelligence. For now, this is spending, whether it will bear fruit or turn out to be a bubble is unknown.
2. Trump’s tariffs are making America richer
“Thanks to tariffs, money is flowing to us by the river. Now we are a rich country,” Trump said in Iowa.
The money is flowing, but not to America. Import duties are Trump’s favorite economic and foreign policy tool. He insists they are paid by foreigners for access to the American market. The reality is exactly the opposite, scientists have proven.
“Every dollar of tariff revenue is a dollar taken from American businesses and communities. Only 4% of duties are paid by foreigners, while the remaining 96% are paid by Americans,” economists at Germany’s Kiel Institute have calculated.
And that’s not the only problem with Trump’s tariffs. Their destructive power is not only in increasing costs for U.S. importers, but also in reducing exporters’ income as other countries retaliate. That’s what China did by restricting U.S. agricultural purchases, resulting in Trump having to write farmers $12 billion in subsidies to keep them from going broke.
Trump boasted in Iowa that the subsidies are proof of the success of his tariff policies. The duties have already brought $200 billion into the budget, and now Trump can hand them out to whomever he wants.
That’s the bad thing, economists warn. The governmentization of the economy, in which not businesses and the population, but Trump decides where to spend the money, distorts market mechanisms, hinders growth and undermines competitiveness.
“Tariff revenues to the U.S. treasury are collected from Americans, not foreigners. Economically, they are indistinguishable from a consumption tax,” wrote German economists at the Kiel Institute.
Their colleagues at the American Tax Foundation call Trump’s tariffs the largest tax increase in the United States in more than 30 years.
No big deal, Trump parries. Americans are getting richer every day anyway, he argues.
3. Trump gave Americans jobs
“Our employment numbers are brilliant, and if I hadn’t cut hundreds of thousands of government workers, they would be even better,” Trump said in Iowa.
Even excluding government workers, private-sector job growth in the first year of Trump’s second term was the weakest in a decade (except for the covid 2020). And if you subtract health care and social service workers, 2025 even saw a decline rather than growth in the number of workers in the U.S. economy, notes Paul Krugman.
4. Trump has made Americans richer
“So many people have gotten rich under me. I’m just working, and they’re getting rich. They’ve never had paychecks like this before. But even better is the stock market,” Trump said in Iowa.
Rising stock prices benefit those who own stocks and, to a lesser extent, those who don’t own stocks but have retirement savings invested in stocks on their behalf.
The faster growth in asset values that Trump is talking about is increasing wealth stratification in America and only widening the gap between those with savings and those living from paycheck to paycheck.
Moreover, the growth rate of the U.S. stock market under Trump has lagged behind all other markets combined. Those who took money out of the U.S. and invested abroad with Trump’s return to the White House earned almost twice as much as those who stayed in dollars.
“If anything is growing fast in America, it’s the wealth of billionaires. There is literally explosive growth there,” writes French economist Gabriel Zucman of the University of California, Berkeley.
According to his data, 15 years ago, the state of the top 20 American rich was equivalent to 3% of the annual national income of the United States. Now it is 12%.
5. Trump has beaten inflation
“Inflation has been stopped,” Trump said in Iowa. – Store prices, airfare, hotels, cars, rentals – everything has gotten cheaper and cheaper very quickly.”
Trump’s approval rating for his success in beating inflation is worthless – 60% are outraged (of which 48% are strongly outraged), the latest YouGov poll showed.
The rate of price growth in the US has slowed, as it has globally, after a post-Kowitz surge, but there is no “price decline” as Trump put it – prices are still rising, just not as fast. And there is a very real risk that this growth will accelerate in 2026, according to economists at the Peterson Institute for International Economics (PIIE).
They predict that importers will finally start raising prices to fend off some of Trump’s import tax, and wage inflation will accelerate with the expulsion of illegal labor. A surge in inflation will prevent the Central Bank from continuing to cut rates, which will slow economic growth.
6. Money is flowing to America
“We’ve been assured of a record $18 trillion dollars in investment inflows,” Trump said in Iowa. – This has never happened in any country at any time in history. It’s just miraculous – and it’s all thanks to tariffs.”
Indeed, Trump spent the entire first year of his second term extracting concessions from trading partners under the threat of import tariffs. In addition to lowering their duties, he demanded promises to invest in the U.S. economy or buy billions of dollars worth of American goods.
Many signed on, but history and common sense cast doubt on the sincerity and feasibility of these promises.
For example, Europe agreed to invest $600 billion in the United States, but economists initially questioned this figure. As a result, the July “deal” went into limbo because Trump decided to tear it up before it was ratified by the European Parliament, threatening new tariffs if Denmark did not give him Greenland.
Of Trump’s claimed $18 trillion investment in the US, $4 trillion has been promised by Arab oil sheiks. However, these golden barchans already remind PIIE economists of a mirage in the Arabian desert.
Neither Saudi Arabia, Qatar, nor the UAE has invested little in the U.S. to date, and trade with America is virtually nonexistent, they note. Besides, they simply don’t have the money or the will to go into debt for Trump and abandon long-approved investments in their own economies to invest in the U.S. economy.
7. The Golden Age of the American Worker
In August, the U.S. Department of Labor announced the “Just Worker Boom.”
Joseph Politano, a former analyst of this agency, analyzed the employment statistics and came to a very different conclusion.
In 2025, the number of manufacturing jobs fell by 65,000, compared to 250,000 in 2024. The slowdown affected all sectors related to working professions, including construction, transportation, mining and manufacturing.
“Tariffs undermine manufacturing employment because they increase the cost of raw materials and components. Raids against migrants undermine construction employment,” he writes. – The White House promises a “boom for ordinary working people.” Nothing of the sort is happening; everything is exactly the opposite.
8. American industry is being revitalized
“Under President Trump, America is experiencing an industrial boom,” the White House announced late last year.
Employment statistics suggest otherwise, as noted. But there are other reasons to doubt the victory speeches of Donald Trump’s entourage.
Trump has bet not on state support, but on forcing foreigners to invest in production in the United States under the threat of tariffs. It’s a risky bet, PIIE economists warn.
“Under Biden, industrial policy was funded by government spending, subsidies and tax credits. The Trump administration is trying to find funding abroad,” they write.
With this approach, it is difficult to make sure that the best projects are selected for investment, rather than those that please Trump or his funders, raising questions about the effectiveness of the investments.
In addition, Trump extracts investment promises with threats, and “coercion is fraught with alienation,” as in the case of the already mentioned U.S.-EU conflict over Greenland.
9. America is consolidating its role as a world leader
“We are going from victory to victory like never before,” Trump said in Iowa. – America is respected around the world like we have never been respected before.
The bare numbers say otherwise.
A recent poll of people in 21 countries found that Trump’s “America First” policy is pushing other countries closer to China – the United States’ main economic, military and political rival.
“The U.S. drive to make other countries ‘pay for defense’ threatens to sour relations with allies and push them to unite against America. And this trend has only intensified after the Greenland story,” PIIE experts note.
And it’s already happening. Canadians are refusing to drink American bourbon, and Denmark has launched mobile apps that help shoppers avoid American products in stores.
10. It’s just getting started
“Under my leadership, we are experiencing an unprecedented economic boom. This has never happened before. And it’s just beginning,” Trump promised his supporters in Iowa.
Trump is confident it’s only going to get better. Economists again say it’s only going to get worse.
Because the main outcome of the first year of Trump’s second term is total fog and uncertainty that prevents businesses and people from planning for the future.
After all, all the conditions for the growth of US prosperity are in place, notes Adam Posen, head of PIIE. Trump has cut taxes, as promised (although he has introduced a new one, but only on imports). Credit is getting cheaper, companies have plenty of money, energy prices are falling, and regulation is easing.
However, people and businesses are in no hurry to spend money and grow the economy. But they are also in no hurry to raise prices and lay off employees. Why? Because Trump.
“Uncertainty is to blame. It paralyzes decision-making,” Adam Posen wrote in an article for Bloomberg Businessweek.
Will Trump draw conclusions and change policy?
Unlikely, doubts Nobel economist Paul Krugman:
“Yes, the US economy did not collapse in 2025. But the outcome is so bad that any other president would have questioned and revised policy. But Trump clearly won’t do that. He always has one reaction: deny failure and do the same with redoubled vigor.”
