Waiting for the Crash

Dec 29 2025 The Guardian

Why haven’t Trump’s tariffs crashed the US economy?

The US economy has not crashed.

Yet…

Effects on inflation and employment have not been as bad as feared – but could still materialise with full force in 2026

You should read the whole piece, but here the four main points:

First, if you still remember, there was a government shutdown in the US in October, and the statistics are not as reliable as they usually are. So, both inflation and unemployment may be higher than what the statistics show at the moment.

Second, the tariffs are high, but as of yet, not all tariffs are fully in effect, some have been rolled back, and there are also exceptions for some countries.

Third, as soon as Trump was elected, companies started importing a lot of goods to fill up their stocks before the tariffs would hit. They have been selling these stocks and not raising prices.

And fourth, importers have in effect continued absorbing the higher costs and not passing them to the consumers. But this erodes the profit margins, and companies will not be doing this forever.

So, 2025 was better than expected, 2026 could be way worse.