Trump’s tariff speech fact-checked: Who really pays the price?

United States President Donald Trump announced sweeping new tariffs on Wednesday, a move he described as a “declaration of economic independence.”

Using national emergency powers, Trump imposed a 10 per cent tariff on all imports into the United States and significantly higher tariffs on goods from around 60 countries or trading blocs with high trade deficits with the US.

Among the most affected are China and the European Union, which will now face tariffs of 34 per cent and 20 per cent, respectively.

While Trump positioned this policy as a necessary measure to counteract what he sees as unfair trade practices, economists caution that such tariffs could drive up costs for American consumers and slow economic growth.

Despite these concerns, Trump and his administration have defended the decision, often making statements that do not align with economic data or historical facts.

The truth about who pays tariffs

A key assertion Trump made in his speech is that the tariffs he imposed during his first term resulted in the US “taking in hundreds of billions of dollars” from China. However, economic research has consistently shown that tariffs are paid by US importers, not foreign exporters.

The additional costs are often passed down to American businesses and consumers, leading to higher prices for goods. Numerous studies have documented how the burden of these tariffs primarily falls on Americans rather than on China or other foreign nations.

White House Press Secretary Karoline Leavitt has echoed this argument in recent press briefings, claiming that “tariffs are a tax cut for the American people.” However, this claim contradicts the prevailing economic consensus.

Experts point out that while tariffs increase government revenue, they also result in higher prices for imported goods , effectively functioning as a tax increase on consumers rather than a financial benefit.

Seven economists consulted on this issue agreed that most of the additional costs are ultimately borne by consumers rather than offset by any tangible tax reductions.

Trump’s claims on trade deficits

Trump has repeatedly exaggerated the scale of the US trade deficit with Canada. He has claimed that the US “subsidises” Canada to the tune of “close to $200 billion a year.”

However, official statistics from US trade agencies indicate that the goods and services trade deficit with Canada in 2024 was $35.7 billion, while the deficit in goods alone stood at $70.6 billion — far below the figure he cited.

Moreover, labelling a trade deficit as a “subsidy” is misleading, as trade imbalances are not equivalent to direct financial support.

On the issue of Canada’s dairy tariffs, Trump correctly pointed out that certain US dairy products face tariffs exceeding 250 per cent. However, his claim that these tariffs apply after just a “single carton of milk” is inaccurate.

Under the terms of the United States-Mexico-Canada Agreement (USMCA), Canada has agreed to import tens of thousands of metric tons of US dairy products tariff-free each year.

The US dairy industry is not currently exporting enough milk to Canada to reach the tariff-free quota, meaning that the high tariffs are not even being applied to the majority of US dairy exports.

Tariffs on China and previous US policies

Another misleading claim made by Trump was that before his administration, China “never paid 10 cents to any other president” in tariffs. This statement ignores the historical reality that the US has been imposing tariffs on Chinese imports for centuries.

Tariffs on Chinese goods have existed since 1789, and Trump’s predecessor, US President Barack Obama, implemented additional tariffs on Chinese products as well. This long-standing policy contradicts Trump’s assertion that he was the first to introduce tariffs on Chinese goods.

Trump also argued that his tariffs have spurred unprecedented growth in US automobile manufacturing, stating, “We have automobile plants being built at levels we’ve never seen … and they’re going up fast.”

However, a closer examination by Politifact revealed that while some manufacturers, including Hyundai, Honda and Stellantis, have announced new investments in the US, most of these involve expansions or modifications to existing facilities rather than the construction of entirely new plants.

Additionally, much of the growth in automotive manufacturing occurred under the Biden administration, making Trump’s claim misleading.

Inflation comparisons

Addressing economic performance, Trump claimed that during Biden’s presidency, the US experienced “the highest” inflation “in the history of our country.”

While inflation did reach a peak of 9.1 per cent in June 2022 — the highest level in four decades — it was still well below the all-time high of 23.7 per cent recorded in 1920. Additionally, by December 2024, inflation had dropped to 2.9 per cent, further undermining Trump’s claim.

Trump also claimed that there was “virtually no inflation” during his first term. While inflation was relatively low compared to the 2022 spike, it was not nonexistent.

Prices rose by approximately 8 per cent over his four-year presidency, and year-over-year inflation stood at 1.4 per cent in January 2021, the month he left office.

Trump further suggested that tariffs contributed to America being “proportionately the wealthiest it has ever been” between 1789 and 1913, before the reintroduction of the federal income tax.

However, by standard economic measures, the US is far wealthier today than it was in the early 20th century. Per capita gross domestic product is significantly higher, and living standards have improved dramatically.

CNN quoted Dartmouth College economist Douglas Irwin who noted that if Trump’s comments refer to per capita income, they are “obviously not true.” Irwin explained, “Real per capita income and standards of living are so much higher today than the past. … It is nice to have indoor plumbing, running water, not outhouses, etc.”

Reality of gas prices

Another claim Trump made during his speech was that gas prices have dropped significantly since he returned to office, stating, “gasoline is way under $3.”

While prices vary by region, national data from AAA shows that the average price of regular gasoline on the day of Trump’s speech was about $3.24 per gallon.

On his inauguration day in January, the national average was approximately $3.12, meaning prices have not seen a substantial decline.

It is also worth noting that presidential policies typically have a limited immediate effect on gas prices, which are influenced by global supply chains and other external factors.

Other fact-checks

Trump’s tariff policies have raised concerns not just in the US but globally with markets in a free fall . The European Union, Canada, and Mexico have voiced opposition, with some nations considering retaliatory measures.

A report from German news outlet DW refuted White House Press Secretary Leavitt’s March 11 claim that “tariffs are a tax hike on foreign countries,” pointing out that higher import costs often lead to increased prices for domestic consumers rather than being absorbed by foreign exporters.

Meanwhile, a viral video circulating in Mexico falsely suggested that the country had closed its borders due to Trump’s tariffs. However, Mexico City-based fact-checking organisation Animal Político clarified that the footage actually depicted a temporary worker strike at a bridge in Nuevo Laredo rather than a government-imposed shutdown.

Economic analyses consistently show that tariffs function as a tax on domestic consumers rather than a financial penalty on foreign nations.

With inputs from agencies