Trump policies slowed US economy growth, raised prices, analysis suggests
10 reported1 unconfirmed
A Vox analysis of economic data from the first half of 2026 reports that President Donald Trump’s tariffs, immigration restrictions, and conflict with Iran have reduced US economic growth and increased inflation compared to what analysts project would have occurred without those policies. US GDP rose at a 2 percent annual rate in the first quarter of 2026 and 2.1 percent in 2025, while the unemployment rate stood at 4.3 percent. However, real wages fell in May 2026 for the first time since 2023 as annual inflation hit 3.8 percent. The article cites estimates from the Peterson Institute for International Economics, the Brookings Institution, the Economist, and the Dallas Federal Reserve to quantify the impacts. It notes that the AI boom and post-COVID supply chain normalization provided tailwinds that kept the economy growing despite the policies.
What’s reported
US GDP grew at a 2 percent annual rate in Q1 2026 and 2.1 percent 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; annual inflation hit 3.8 percent.
According to the Peterson Institute for International Economics, tariffs reduced US growth in 2025 by 0.23 percentage points.
The Economist reported that excluding AI-related categories, business investment fell at a 3 percent annualized rate over the last four quarters, shaving about 0.4 percentage points off 2025 GDP growth.
A Brookings Institution report found that the decline in immigration in 2025 shaved up to 0.26 percentage points off US GDP.
Combined, these analyses suggest growth would have been about 0.9 percentage points higher in 2025 without Trump’s trade and immigration policies.
A Dallas Federal Reserve report 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 estimated a three-month closure of the Strait of Hormuz would add 0.35 points to headline inflation; six months adds 0.79 points; nine months adds 1.47 points.
Mortgage rates have climbed since the war with Iran started in late February 2026.
Open questions
The precise impact of the Iran war on 2026 growth is unclear, as the article states it depends on the conflict’s trajectory.
Key figures
President Donald Trump
Peterson Institute for International Economics (cited)
Brookings Institution (cited)
The Economist (cited)
Dallas Federal Reserve (cited)
Federal Reserve economists (cited)
Sources: vox.com
