So, were the experts wrong, or is it simply too early to make a verdict? Let’s take a closer look.

Mixed bag of economic impacts

Although the Trump administration’s tariffs have captured plenty of headlines, the reality is that most of America’s major trading partners have avoided severe tariffs as of mid-August. Mexico and China have both received 90-day pauses on tariffs, while 90% of the goods imported from Canada are exempt from the tariffs under the United States-Mexico-Canada Agreement, according to Axios and BDO Canada.

Nevertheless, American consumers do face an average effective tariff rate of 18.2% on the goods they buy, according to Yale’s Budget Lab. This effective tariff rate has delivered $142 billion in tax revenue to the U.S. government so far this fiscal year, which ends in September, according to the Treasury Department.

Although $142 billion is a huge tax haul, it’s only 3.2% of the 4.35 trillion that represents the U.S. government’s overall revenue in 2025, which isn't close to replacing all income taxes as Trump promised during his campaign. Unable to cover its tax cuts with additional revenue, the government continues to plunge further into debt. The budget deficit ballooned 20% year-over-year in July alone, according to the Treasury Department.

Meanwhile, the ongoing trade war has unleashed a wave of uncertainty among businesses and consumers that is creeping into economic data.

Lower consumer and business confidence

Businesses and consumers don’t seem to share Trump’s enthusiasm for tariffs. According to a CNBC survey from April, 55% of Americans disapprove of Trump’s handling of the economy, with tariffs playing a large role in that result.

Business leaders echo that sentiment. Harley-Davidson, Mercedes, Hershey, Walmart and Adidas have all warned about the impact of tariffs on their margins. Meanwhile, a Bloomberg analysis of earnings call transcripts in the second quarter of 2025 found that the mentions of "economic slowdown” jumped 91% from the previous quarter.

These corporations are also absorbing much of the tariff impact, for now, because of the expectation that the tariffs will be slashed or suspended in the near future. Analysts at Goldman Sachs expect American businesses to gradually pass along price hikes to consumers as it becomes more clear where the tariff rates will land in the long term.

Meanwhile, a series of awful jobs reports in May, June and July could be signaling a recession, according to economists who spoke to CNN. Trump’s decision to fire the head of the Bureau of Labor Statistics — who was in charge of producing these job reports — and replace her with someone who has called for halting monthly jobs reports has also sparked backlash.

“If Trump's economy was doing great, they wouldn't be trying to hide the numbers,” Senator Mark Kelly said on Threads.

What comes next?

With tariffs seemingly here to stay, it seems likely that consumers and businesses can expect a combination of higher prices and lower profits in the months ahead. Coupled with the slowing jobs market, this economy is starting to look particularly vulnerable.

If you share these concerns, consider bolstering your emergency fund and cutting back on non-essential spending until the full impact of the trade war becomes more clear.