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Opinion
– President Donald Trump has shaken up the global economy and the international rule of law in the first year of his second term, ostensibly to make America great again, particularly by reviving American manufacturing jobs.
Jomo Kwame Sundaram
The President has assumed the authority of the United States Congress to wage war, levy taxes, make treaties, set budgets, regulate relations between the federal government and the states, and more.
Rates
The tariffs that Trump imposed on April 2, 2025, Liberation Day, were apparently his main means of creating manufacturing jobs.
When the US Supreme Court overturned it on February 20, it responded by imposing a 10% tariff on all imports, increased to 15% the next day!
Tariffs are a powerful means to revive manufacturing jobs in the United States. The policy assumes that American manufacturing jobs have been lost primarily due to what the White House considers “unfair” competition from cheap imports.
Without a doubt, American and other transnational corporations have relocated production and generally sourced imports from abroad to reduce import costs.
Imposing tariffs on imported goods to raise their prices is supposed to induce manufacturers to move production and jobs to the United States.
Higher tariffs were imposed on countries with larger goods trade surpluses with the United States. This ignores the balance of trade in services, generally more favorable to the United States.
Tariff threats are now among the Trump administration’s chosen weapons or means of economic coercion, including sanctions, to promote and secure its interests.
K Kuhaneetha Bai
Revenue
The President claimed trillions of dollars in additional tariff revenue for the Treasury from foreign exporters to finance his huge increase in military spending.
But only $264 billion was raised during the first year of Trump 2.0, much more than before, but still less than 1% of the US federal debt.
Tariff revenues peaked in October 2025 at $31.35 billion, well below expectations, months before the Supreme Court decision.
The Kiel Institute for the World Economy found that only 4% of tariffs were “absorbed” by foreign exporters who lost some export revenue. American importers paid the balance of 96% of $264 billion in tariffs, weakening the impact of Trump’s corporate tax cuts.
But Trump’s tariffs have not reduced the US trade deficit, not even in manufacturing; this increased to $1 trillion in 2025, as $3.15 trillion in imports exceeded $2.15 trillion in exports.
Although interest rates on mortgages and loans have not fallen, inflation continues. The additional tariff revenue would not even have covered the additional military budget Trump promised.
Congress could have reclaimed its tariff authority, although the current Trump-dominated House of Representatives has not attempted to do so.
But with the November midterm elections around the corner, Forbes reported that the president’s disapproval rating rose to 55% in mid-February, as fewer people trust his administration to prioritize curbing inflation.
Financialization
The US federal debt, at around $39 trillion, now requires more than $1 trillion in annual debt service out of the $7 trillion annual budget.
This unpayable debt, growing between $1.5 and $2.0 trillion a year, is being “rolled over” for increasingly shorter maturities. Hedge funds now own 27% of US Treasuries, while foreigners, who owned half in 2015, now own just 30%.
Treasury bond repurchase agreements (or repos) provide about $4 trillion a day in financing for derivatives speculation. Another financial crisis may wipe out many more trillions of often dubious “securities.”
As the U.S. economy, productive employment, and research funding decline, several unpayable debt bubbles are growing rapidly. Worse still, so-called stablecoins and cryptocurrencies have infiltrated financial markets.
Meanwhile, some mortgage delinquency rates in the United States have reached levels worse than in 2007-08. By the end of 2025, financial news agencies were publishing ominous reports about financial vulnerabilities.
Hundreds of billions of promised investments, coerced by other nations through tariffs and other threats, will pour into America’s financial asset markets, but little of it will create manufacturing jobs.
Return of manufacturing
Trump has promised to make the United States once again a manufacturing superpower, leading the world in technology, computing power and military weaponry. But China is ahead in many – if not most – areas of recent technological advances.
Dean Baker found that the US labor market is weakening during the first year of Trump 2.0. Overall, manufacturing job growth slowed from Biden’s last year.
American manufacturing jobs have long been threatened by transnational corporate globalization and labor-saving technical changes, especially automation.
American policy in recent decades has left the private sector responsible for ensuring the leadership and progress of American industrial technology. Meanwhile, issues such as poor infrastructure remain unaddressed.
Trump’s tariffs may also inadvertently reduce American jobs. Many industrial processes require imported parts, and tariffs are harmful.
Trump’s policies have not created enough manufacturing jobs. The president fired the Labor Department’s chief statistician in mid-2025 for failing to report sufficient job growth.
However, it reported only 584,000 net new jobs for all of 2025, compared to 1.6 million in 2024, for the US workforce of 165 million!
He Wall Street Journal noted: “The manufacturing boom that President Trump promised… is going in reverse.”
The Trump administration could still use the Supreme Court ruling to change its strategy and make America great again, drawing better lessons from American economic history and taking a more pragmatic approach. But so far it seems unlikely that he will do so.
IPS UN Office
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