By Wu Siya

BEIJING, Dec. 24 (China Economic Net) - To convince the nation that the economy is improving ahead of the midterm elections, Trump is highlighting a reduced trade deficit and high tariff revenues as his key economic accomplishments since taking office.

Now, the President is touring swing states.

“Remember when I said ‘tariff’- my favorite word is ‘tariff,’” Trump told in Pennsylvania, “Tariffs are bringing us hundreds of billions of dollars. We had the worst trade deals ever made, and our country was laughed at from all over the world, but they're not laughing anymore.”

But is that really the case?

The writing on the wall

Wayne Winegarden, a senior fellow for business and economics at the Pacific Research Institute, a free-market think tank, warned that a smaller trade deficit and record tariff revenue could, at best, be a bad indicator of overall economic health, and at worst, a sign of economic problems.

“If we reduce the trade deficit, we’ll buy goods from American companies, and we’ll all benefit-that’s a tempting idea, but it’s a flawed perspective. Unlike a budget deficit, a trade deficit is meaningless.”

“It has nothing to do with affordability or growth, so it’s purely a distraction,” Winegarden added.

Kimberly Clausing, a professor of tax law and policy at UCLA School of Law and a former U.S. Treasury official, points out that a narrowing trade deficit may simply mean that people are reducing overall spending and investment.

Where is the promised “new golden age”?

Moments into his second term, opening his inaugural address, Donald Trump was unequivocal. “The golden age of America begins right now”.

In 2025, the US economy faces upward pressure. The golden age of the US economy promised by the president has not yet arrived.

Civilian unemployment rate [Photo/ US Department of Labor]

In terms of employment, The U.S. Department of Labor reported on December 16 that 105,000 jobs were laid off nationwide in October, while 64,000 new jobs were added in November, and the unemployment rate rose to a four-year high of 4.6% in the past month. Furthermore, in the domestic manufacturing sector, the Bureau of Labor Statistics reported that as of September 2025, the industry's workforce would be 12.706 million, a decrease of 49,000 from the 12.755 million at the end of January 2025 when Trump took office.

According to the official data for the first 11 months of this year, an average of 55,000 new jobs were created each month, which was 67% lower than in 2024.

While, despite the president’s repeated claims that “bringing those high prices down and bringing them down very fast,” the truth, is clearly not so.

“The economic downturn has dragged the president’s tough tariff policies into a political and legal vortex, leading to a likelihood that trade barriers will decrease rather than increase in the coming months,” noted Alec Phillips, Goldman Sachs’ chief U.S. political economist, in a recent report. With the March midterm elections approaching, the cost of living remains “a top concern for voters,” and “there is an obvious choice at hand: the most obvious policy lever is to lower tariffs,” Phillips added.

A recent analysis by Groundwork Collaborative, The Century Foundation, and AFT shows that during President Trump's administration, the prices of many of the most popular holiday gifts rose significantly, with an average increase of 26%, almost nine times the overall inflation rate. Regardless of their children's age, parents will feel the price tag shock this holiday season.

Price changes of 70 popular gifts [Groundwork Collaborative, The Century Foundation and AFT]

The report shows that this Christmas season, prices for home and kitchen gifts in the United States rose 38% year-over-year, electronics prices increased by 34%, clothing, shoes, and accessories by 20%, and toys and games by 17%. In response to the price increases, 40% of households reduced the number of gifts they bought, and nearly a third reduced the number of recipients. “The Trump administration's erratic tariff policies are the main culprit for the rising prices of holiday goods.”

“Trump and his officials have an almost messianic belief the economy will step up a gear in the first quarter of next year. It is said that this confidence stems from the prediction of Trump's massive One Big Beautiful Bill Act,” Ma Wei, assistant researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, told China Economic Net.

Uncertainty remains the theme

In the eyes of economists, a “new golden age” remains far from being realized.

“Most lower income Americans will be hurt (net) by these policies,” said Simon Johnson, a Nobel prize-winning economist and professor at MIT’s Sloan School of Management. “Hard to see how 2026 will be better for most people.”

The US economy is forecast to grow by 2% this year, down from 2.8% in 2024. A large number of economists expect only a pretty small fiscal boost from Trump’s policies next year.

“Moreover, tariff policies have further exacerbated the risk of runaway inflation in the United States. Since April, both the US CPI and core CPI have continued to rise, reaching 3% in September. Further easing of fiscal and monetary policies will put even greater pressure on inflation. Although the inflationary impact of tariffs is lagged, it will eventually gradually manifest itself. In 2025, the impact of high tariffs on the United States will largely be absorbed by importing companies by squeezing their profit margins. However, many recent surveys show that importing companies are planning to pass on a larger proportion of the costs to consumers. Furthermore, due to the lagged nature of the tariff inflationary effect, its impact may be more persistent than expected, rather than a one-off event. Therefore, the risk of runaway inflation in the United States in 2026 cannot be ignored,” Ma emphasized.