Trump policies slowed US economic growth and raised inflation, analysis suggests
8 reported1 unconfirmed
A Vox analysis of the US economy under President Donald Trump reports that while GDP grew at a 2 percent annual rate in the first quarter of 2026 and unemployment stood at 4.3 percent, the economy would have performed significantly better without Trump’s trade, immigration, and foreign policies. The article cites multiple economic analyses to estimate the impact of tariffs, reduced immigration, and the conflict with Iran. According to the Peterson Institute for International Economics, tariffs reduced America’s growth rate in 2025 by 0.23 percentage points, though the Economist notes this likely understates the full impact due to investor uncertainty. A Brookings Institution report found that last year’s decline in immigration shaved as much as 0.26 percentage points off US GDP. The Dallas Federal Reserve estimated that without tariff impacts, core inflation would have been 2.3 percent in March 2026 instead of 3.2 percent. A separate Federal Reserve paper estimates that a closure of the Strait of Hormuz due to the Iran war could add 0.35 to 1.47 points to headline inflation depending on duration. The article notes that the AI boom and post-COVID supply chain normalization provided economic tailwinds independent of Trump’s policies.
What’s reported
US GDP rose at a 2 percent annual rate in the first quarter of 2026 and a 2.1 percent pace in 2025.
Unemployment rate was 4.3 percent as of the article’s reporting.
Real wages fell in May 2026 for the first time since 2023, with annual inflation at 3.8 percent.
Peterson Institute for International Economics estimates tariffs reduced 2025 growth by 0.23 percentage points.
Brookings Institution report says last year’s immigration decline shaved up to 0.26 percentage points off GDP.
Dallas Federal Reserve analysis shows core inflation would have been 2.3 percent instead of 3.2 percent in March 2026 without tariffs.
Federal Reserve paper estimates a three-month Strait of Hormuz closure would add 0.35 points to headline inflation; six months adds 0.79 points; nine months adds 1.47 points.
Excluding AI-related categories, business investment fell at a 3 percent annualized rate over the last four quarters.
Open questions
The precise impact of the Iran war on 2026 growth is unclear, as much depends on the trajectory of the conflict.
Key figures
President Donald Trump
Peterson Institute for International Economics (cited)
Brookings Institution (cited)
Dallas Federal Reserve (cited)
Federal Reserve economists (cited)
The Economist (cited)
Sources: vox.com
