Fact Check: The U.S. economy is thriving despite the impact of tariffs.

Fact Check: "The U.S. economy is thriving despite the impact of tariffs."

What We Know

The claim that "the U.S. economy is thriving despite the impact of tariffs" is contradicted by several recent analyses. According to a report from The Budget Lab at Yale, the tariffs imposed in 2025 have led to a significant decrease in real GDP growth, estimated at -0.6 percentage points for the year. Furthermore, the long-term effects of these tariffs are projected to shrink the U.S. economy by approximately 0.3% annually, which translates to a loss of around $100 billion in 2024 dollars each year.

The Congressional Budget Office (CBO) also supports these findings, indicating that the changes in tariffs will reduce the size of the U.S. economy due to retaliatory tariffs from other countries and decreased investment and productivity (CBO). The CBO estimates that inflation will rise by an average of 0.4 percentage points in 2025 and 2026, further diminishing household purchasing power.

Additionally, the tariffs have resulted in higher consumer prices, with an average price increase of 1.5% in the short run, equating to a loss of about $2,000 in household income for 2025 (The Budget Lab). This economic strain is particularly felt by lower-income households, which face disproportionate impacts from the increased costs of goods.

Analysis

The evidence presented from multiple sources indicates that the tariffs have had detrimental effects on the U.S. economy rather than fostering a thriving economic environment. The CBO and The Budget Lab provide credible assessments based on comprehensive economic modeling and data analysis. Both sources are reputable, with the CBO being a non-partisan federal agency that provides economic forecasts and budgetary analysis, while The Budget Lab is associated with Yale University, known for its rigorous academic research.

The findings from these sources highlight a consistent narrative: tariffs have led to reduced GDP growth, increased unemployment rates, and higher consumer prices. For instance, the unemployment rate is projected to rise by 0.3 percentage points by the end of 2025, with payroll employment decreasing by approximately 394,000 jobs (The Budget Lab). This evidence suggests that the economic landscape is not thriving but rather facing significant challenges.

In contrast, some analyses, such as those from J.P. Morgan and Deloitte, suggest that tariffs could have mixed effects on economic growth. However, these reports do not provide a counter-narrative strong enough to outweigh the substantial evidence indicating negative impacts from tariffs.

Conclusion

The claim that "the U.S. economy is thriving despite the impact of tariffs" is False. The evidence clearly indicates that tariffs have led to a contraction in real GDP growth, increased unemployment, and higher consumer prices, which collectively undermine the notion of a thriving economy. The economic data from credible sources such as the CBO and The Budget Lab demonstrate that the tariffs have adverse effects that are felt across various sectors of the economy.

Fact Check: The U.S. economy is thriving despite the impact of tariffs.