FIW PB-72 One Year of America First 2.0: Assessing the Effects of Trump’s Trade Policies

Abstract: This Policy Brief evaluates the trade policy of Donald Trump during the first year of his second presidential term. The administration pursued a strongly protectionist agenda, implementing new tariffs on a wide range of products and trading partners, including long‑standing allies such as the EU, Canada, and Mexico, as well as strategic competitors such as China. The analysis documents a substantial increase in U.S. economic policy uncertainty induced by tariff measures, with the Economic Policy Uncertainty and related trade policy indices reaching historical highs in 2025. Early economic effects include a depreciation of the U.S. dollar against major currencies, reduced U.S. import volumes – particularly from China and, after an initial frontloading, from the EU and Austria – and a modest but measurable pass‑through to consumer prices, adding roughly 0.7 percentage points to U.S. inflation by September 2025. For trading partners such as the EU and Austria, descriptive evidence points to declining exports to the U.S. and a reduction in the U.S. share in Austrian goods exports after tariff implementation. The Policy Brief concludes by outlining policy options for the EU and Austria to mitigate these losses, emphasizing alternative trade policy initiatives with like‑minded partners, measures to strengthen the competitiveness and resilience of the European Single Market, and the importance of a rules‑based multilateral trading system, while cautioning against a generalised resort to safeguard tariffs.

Harald Oberhofer (Austrian Institute of Economic Research (WIFO), Vienna University of Economics and Business (WU))
One Year of America First 2.0: Assessing the Effects of Trump’s Trade Policies
FIW-Policy Brief 72
January 2026
Language: English