A year after US President Donald Trump introduced a fresh round of tariffs, the economic fallout has proven uneven, with employment taking a clearer hit than prices. At the time, economists warned that the measures would drive up inflation and push unemployment higher. Data from 2025 suggests those concerns were only partly true. While the cost of some imported goods, including beef, coffee and tomatoes, rose sharply, overall price increases remained broadly steady. The labour market, however, weakened noticeably, CNN reported. Average monthly job growth in 2025 was the lowest seen in decades outside recessionary periods. The December jobs report, released on Friday, showed the unemployment rate rising by 0.4 percentage points over the year to 4.4%. Hiring had already begun to slow before 2025, but Trump’s wide-ranging tariffs, and the repeated changes to them, added to the pressure. Faced with uncertainty over future trade policy, many companies froze recruitment plans, while some moved to reduce their workforce. “There’s no compelling reason to be out there hiring en masse,” said University of Central Florida economist Sean Snaith. “That is a rational response when you’re dealing with this kind of uncertainty.” Tariffs have also reshaped business decisions around investment and profitability. “Companies are seeing higher prices, depressing profitability; and in terms of new investment, they’re hesitant because tariffs make a lot of investments that have been profitable unprofitable,” Dean Baker, senior economist at the Center for Economic and Policy Research told CNN. Demand has softened as well, with customers delaying purchases amid shifting tariff levels. The Federal Reserve Bank of Richmond noted in its latest Beige Book that several manufacturing contacts “said that their customers reduced new orders due to uncertainty about tariffs.” Confusion has not been limited to consumers. Trump’s unpredictable trade moves have left many firms unsure how to respond. So far, many have chosen to absorb higher tariff costs rather than pass them on, helping to prevent a broader rise in inflation, CNN reported. That balance could shift depending on the outcome of a major Supreme Court case that may overturn Trump’s most significant tariffs. If the levies are struck down, companies could be entitled to substantial refunds for duties already paid, though resolving such claims could take considerable time.
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