Trump's Economic Legacy, One Year Later

Tariffs, immigration crackdowns, and corruption have shaped the U.S. economy under Trump's second term.

Published on Feb. 20, 2026

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One year into President Donald Trump's second term, the U.S. economy grew 2.2% in the past year. However, Trump's economic agenda went far beyond just achieving growth, including a revamp of the country's trade and immigration policies. Economists analyze the effects of Trump's tariffs, immigration crackdowns, and allegations of corruption, and whether they achieved their intended goals or had unintended consequences.

Why it matters

Trump's economic policies during his second term, including tariffs, immigration restrictions, and potential corruption, could have long-lasting impacts on the U.S. economy. Understanding how these policies have played out so far is crucial for evaluating their effectiveness and any broader implications for the country's economic health and competitiveness.

The details

Trump's tariffs were intended to boost domestic manufacturing by making imported goods more expensive. However, studies show 90% of the cost of these tariffs has been absorbed by American businesses and consumers, hurting their competitiveness. Meanwhile, Trump's crackdown on immigration has reduced the foreign labor force, squeezing industries like agriculture and construction that rely on undocumented workers, though the broader economic impact has been muted so far. Allegations of corruption, such as the Trump family's business dealings with Gulf states, raise concerns about the erosion of the rule of law, which could lead to inefficiencies and misallocation of capital in the long run, even if corruption can facilitate rapid growth in the short term.

  • Trump will deliver the first State of the Union speech of his second term next week.
  • The latest study by the New York Fed on the impact of Trump's tariffs was recently published.

The players

Donald Trump

The 46th President of the United States, currently serving his second term.

Adam Tooze

An economics columnist for Foreign Policy magazine and co-host of the Ones and Tooze podcast.

Cameron Abadi

The host of the Ones and Tooze podcast and the interviewer in this conversation.

Nvidia

An American technology company that manufactures graphics processing units (GPUs).

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What they’re saying

“First of all, the two things are not contradictory. Inflation is a measure of the rate of change of prices. When inflation stops, the rate of increase goes down. That's what we mean when we say that inflation is under control. But of course, affordability is the description of a state, not a rate of change.”

— Adam Tooze, Economics Columnist, Foreign Policy (Ones and Tooze Podcast)

“The short answer is it's too soon to tell. This is going to take time. In the long run, of course, one would expect inefficiencies to result from this. One would expect misallocation of capital. In the end, you would expect really bad effects like the increase in crony networks, the erosion of institutional trust, all that kind of thing.”

— Adam Tooze, Economics Columnist, Foreign Policy (Ones and Tooze Podcast)

What’s next

Economists will continue to monitor the long-term impacts of Trump's economic policies, including any effects on industrial production, manufacturing competitiveness, and potential corruption.

The takeaway

While Trump's economic agenda during his second term aimed to boost domestic manufacturing and restrict immigration, the results so far have been mixed at best, with tariffs hurting American businesses and consumers more than foreign competitors, and immigration restrictions having a limited broader impact. The potential for increased corruption and erosion of the rule of law also raises concerns about the long-term health of the U.S. economy.