The Five Critical Ways Trump's Trade War 'Victory' Is Already Under Siege

Despite former President Donald Trump's repeated claims of a "trade war victory", the complex web of tariffs and trade agreements he implemented is currently facing an unprecedented siege, both domestically and internationally. As of late 2025, the economic and geopolitical pressures are mounting, threatening to dismantle the perceived successes of the "America First" trade agenda and potentially unleashing a new wave of global economic chaos.

The core challenge is that the initial goals—reducing the trade deficit, bringing manufacturing jobs back to the US, and forcing China to change its intellectual property practices—have either been partially met at a high cost or have been fundamentally undermined by subsequent global shifts and retaliatory measures. The legacy of the trade war is now being tested by market forces, a new political landscape, and the unpredictable nature of international commerce.

The Five Critical Forces Undermining the Trade War Legacy

The narrative of a decisive trade victory is being challenged on multiple fronts. From the direct financial burden on American consumers to the destabilization of global supply chains, the long-term consequences are becoming starkly clear. The following five areas represent the most significant threats to the enduring success of the Trump-era trade policy.

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1. The Crushing Economic Cost to US Households and GDP

The most immediate and tangible threat to the trade war's legacy is the financial burden it has placed on American consumers and the broader economy. Tariffs, which are essentially taxes on imported goods, are largely paid by US importers, who then pass those costs on to businesses and households.

• Household Tax Increase: New analysis projects that the continuation of Trump-era tariffs amounts to an average tax increase per US household, estimated to be around $1,200 in 2025 and potentially rising to $1,600 in 2026.
• Reduced GDP: Economic models, including those from the Wharton School's Penn Wharton Budget Model (PWBM), project that a broad application of tariffs, such as a universal 10% tariff, could reduce long-run US Gross Domestic Product (GDP) by approximately 6%.
• Global Slowdown: The ripple effect is not limited to the US; the tariff policy is projected to lower long-run global GDP by about 0.1%, with economies like China and Canada each seeing their economies shrink by over 0.2%.

The initial intent was to punish foreign producers, but the reality is that the tariffs act as a regressive tax, disproportionately affecting lower-income American families and creating a significant drag on national economic growth.

2. The Threat of a Second, More Destructive Trade War

The current political climate suggests that instead of easing, trade tensions could escalate, fundamentally unwinding any previous benefits. The prospect of a second Trump administration has been accompanied by discussions of even more aggressive trade measures, which would put the global trading system "under siege."

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• Universal 10% Tariff: A key proposal for a potential new administration is the imposition of a universal 10% tariff on all imported goods from all countries not subject to other sanctions. This measure would dramatically broaden the scope of the trade war beyond China and the EU.
• Retaliation Risk: Such a move risks triggering massive and immediate retaliation from nearly every US trading partner, including key allies, disrupting global supply chains and trade flows far beyond the initial US-China dispute.
• Uncertainty and Investment: The constant threat and implementation of new tariffs depress business sentiment, causing companies to delay or scrap investment plans due to extreme policy uncertainty.

This escalating threat demonstrates that the "victory" was, at best, a temporary truce, and the underlying conflict is poised for a major, economy-damaging renewal.

3. The Failure to Fundamentally Shift China’s Trade Practices

The centerpiece of the trade war—the Section 301 tariffs on China—was intended to force Beijing to abandon unfair trade practices, particularly regarding intellectual property theft and forced technology transfer. While the Phase One deal did include commitments for China to purchase more US agricultural products and energy, the structural issues remain largely unresolved.

• Unchanged Structural Issues: Despite the tariffs, fundamental aspects of China's state-centric economic model, which the US views as unfair, have not significantly changed.
• Supply Chain Diversion, Not Return: Instead of manufacturing jobs returning to the US, many companies simply diversified their supply chains to other low-cost countries in Southeast Asia, such as Vietnam and Thailand, bypassing the tariffs without creating new American jobs. This shift challenges the trade war's goal of re-industrialization.
• Continued Tariff Complexity: The current environment is a confusing mix of overlapping measures, including the original Section 301 tariffs, reciprocal duties, and product-specific controls, making it difficult for businesses to navigate and plan for 2025.

The trade war successfully raised awareness and generated revenue, but it failed to deliver a decisive, long-term change in China's industrial policy, leaving the core economic rivalry intact.

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4. Erosion of Alliances and the Weakening of the WTO

A crucial part of the trade war's "siege" is the damage done to US relationships with key allies and the international institutions that govern trade. President Trump’s use of national security justifications (Section 232 tariffs on steel and aluminum) against allies like Canada, Mexico, and the European Union strained diplomatic ties and undermined the concept of collective action against shared rivals.

The policy of unilateral action, often bypassing the World Trade Organization (WTO), has severely weakened the global trade body, making it less effective in resolving disputes and setting international norms. This erosion of multilateralism means that future trade conflicts are more likely to be settled through brute-force tariffs rather than negotiated, rules-based agreements, creating a more unstable and unpredictable global economy.

5. The Unintended Consequences on Key US Industries

While the trade war was designed to protect domestic industries, it created significant blowback for other sectors, most notably US agriculture. Retaliatory tariffs from China, particularly on products like soybeans, pork, and corn, devastated American farmers, requiring massive government bailout packages to mitigate the damage.

Furthermore, the tariffs on imported steel and aluminum, while intended to help domestic producers, raised input costs for US manufacturers (like automakers and construction companies), making their final products more expensive and less competitive globally. This created a conundrum where one stated goal (protecting industry) challenged another (winning the AI race and reindustrializing the US) by raising the cost of necessary materials.

Conclusion: The Siege Continues

The claim of a "trade war victory" is increasingly unsustainable under the weight of economic data and geopolitical reality in late 2025. What was achieved—a Phase One deal with China and the renegotiation of NAFTA into the USMCA—came at a steep price: elevated costs for US consumers, diminished global GDP, and a fractured international trade system. The legacy is not one of decisive victory but of ongoing, costly siege. The ultimate destiny of the Trump tariffs, as some analysts suggest, still awaits its date with destiny, but the current trajectory points toward a greater reckoning with the long-term economic fallout.