In 2025, Donald Trump’s trade policy was remembered for erratic decision-making and high tariffs. This narrow approach has thrown businesses nationwide into a dangerous state of limbo. That uncertainty has created a significant freezing up when it comes to hiring. As a result, unemployment rates have soared, and job creation has come to a standstill. Economists and analysts are going to have to scrutinize what the fallout from these tariffs is. They have been warning about the dramatic impacts these retaliatory tariffs will have on American prices and jobs.
By December, Trump had imposed comprehensive tariffs on dozens of countries and dozens of products. These measures were designed to save American jobs, but the outcomes have been anything but positive. Further tariff amendments brought more confusion and unpredictability that rocked the market already. So it’s no surprise that many employers have decided to hit the brakes on their hiring plans. Some have even proactively laid off workers to curb risks associated with the new trade landscape.
The tariffs caused extreme price surges for key imports—such as beef, coffee and tomatoes. This inflationary pressure has only added stress to household budgets and reopened debates over the effectiveness of Trump’s trade policy. As Dean Baker, senior economist at the Center for Economic and Policy Research, recently pointed out, had the tariffs resulted in large price hikes in the first place. At the same time, none of them did anything to improve job opportunities.
Economists had for years decried that Trump’s trade policies were a double threat waiting to strike with price increases accompanied by a surge in unemployment. So far, their predictions have come to fruition as the unemployment rate ticked up 0.4 percentage points to 4.4% in 2025. Additionally, the average monthly job growth during this period was reported to be the lowest in decades, excluding recession years. These stats are a testament to the negative impact the trade policy is having on an economy that is already feeling the pinch.
As companies deal with the fallout from Trump’s trade moves, even more uncertainty exists about what their strategy should be going forward. Businesses are forced to make tough decisions in a high-stakes environment. Consequently, most remain afraid to invest in hiring for new work or just beginning new projects. This lack of commitment only breeds further stagnation in an already stalled project.