The tariffs of 2025: Did they really hurt American jobs more than your wallet?
When President Trump introduced new tariffs last year, many economists predicted a surge in prices and job losses. Now that we have most of the 2025 economic data, it seems those predictions were only partially correct.
While the cost of some imported goods, like beef, coffee, and tomatoes, did increase significantly, the overall rise in prices was relatively small. However, the job market painted a different picture.
Average monthly job growth in 2025 was the lowest in decades, excluding recession years. Furthermore, the unemployment rate rose by 0.4 percentage points to 4.4% throughout 2025, according to the December jobs report.
Even though the job market was already tightening before 2025, Trump's wide-ranging tariffs and subsequent adjustments didn't help. This created a cloud of uncertainty, causing businesses to pause hiring or, in some cases, lay off workers.
"There's no compelling reason to be out there hiring en masse," explained Sean Snaith, an economist at the University of Central Florida. "That is a rational response when you’re dealing with this kind of uncertainty."
But here's where it gets controversial... Tariffs have also altered how businesses calculate profitability.
Dean Baker, a senior economist at the Center for Economic and Policy Research, noted, "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."
Customers, too, have been postponing purchases due to the constant changes in tariff levels. For instance, the Federal Reserve Bank of Richmond mentioned in its recent Beige Book that several manufacturing contacts "said that their customers reduced new orders due to uncertainty about tariffs."
And this is the part most people miss... It's not just consumers who are confused; Trump's unpredictable trade policies have also paralyzed businesses. They've mostly absorbed the higher tariffs without passing the costs to consumers, which has helped keep inflation in check.
That could change, though. The Supreme Court is currently reviewing a significant tariff case that could invalidate Trump's most significant levies. If that happens, companies could even receive substantial refunds for the tariff costs they've already paid, although this process could take a while.
Ultimately, the relatively modest price increases and the slower hiring, despite their different appearances, stem from the same root cause: uncertainty.
What do you think? Did the tariffs affect your job or spending habits? Share your thoughts in the comments below!
