On April 2, 2025, Donald Trump gave a speech, made a promise, and started a global trade war. That day, in the White House gardens, the President of the United States imposed unaffordable tariffs on almost the entire planet, ensuring that day would be remembered forever "as the day the American industry was reborn; the day the destiny of the United States was regained; the day our nation prepared to be prosperous again." Euphoric, applauded by his followers, Trump insisted that for decades his country had been "plundered, looted, outraged, and stripped by nations near and far, both friends and enemies alike," and celebrated an unprecedented tariff barrage, the greatest protectionist barrier in a century based on a completely absurd mathematical formula. "This is one of the most important days in the history of the United States. It is our declaration of economic independence," he warned.
From that day until today, everything has been chaos. Political, institutional, economic, and geopolitical. Noise, war, clash, and destruction. Despite everything, the world has not internalized the MAGA leader's way of acting, and continues to be surprised. It is a succession of back and forth, threats and retractions, distractions. There is no plan, only improvisations, daze, abuse of power. And if there is one thing the U.S. has, it is power.
A distressing, painful, and enormously costly path. Self-destructive as well. "Before the war broke out in Iran, our global growth indicator suggested that the world economy was gaining momentum," notes Jamie Rush, director of global economics at Bloomberg Economics. "PMI figures from advanced economies suggest that this incipient recovery is at risk of being stifled by a combination of higher oil costs, tighter financial conditions, and wavering confidence sentiment."
The war in Iran, which the Republican leader jokingly refers to as "a little excursion," is the final blow to an extremely long year that has passed very quickly. With oil above $100, an energy crisis looming of unprecedented dimensions in decades, with a potential food crisis in Africa and Southeast Asia. And with the capacity to spread to all sectors. There are cracks in private credit, nerves among entrepreneurs and analysts, questions about containment walls. All surveys known this week, such as those of purchasing managers (PMI), indicate that the conflict is destabilizing companies, from Washington to Brussels and from Bangkok to Australia.
In the Eurozone, for example, the private sector almost stagnated in March, with confidence at its lowest level in 10 months and the first "warnings of stagflation," according to S&P Global Market Intelligence, the firm that compiles the PMI indices. "Our room for maneuver is more limited than before due to previous crises and the need to increase defense spending," warned the European Commission this Friday, also openly mentioning a risk of "stagflation." Even before the United States and Israel launched attacks, the likelihood of an economic recession had already increased significantly, according to Mark Zandy, chief economist at Moody's. In February, the economic indicators model of the rating agency already placed the probability of a recession at 49% for the next 12 months. Now, much higher. Goldman Sachs increased its estimate to 30%. Wilmington Trust sees the odds at 45% and EY Parthenon estimates 40% even if the situation in the Middle East does not escalate. "If the war stops but Iran continues to pose a threat to trade, a threat to the Strait of Hormuz, a threat to the peaceful coexistence of the region, we could have years with oil prices above $100, even closer to $150, which would have profound repercussions," warned Larry Fink, CEO of Black Rock this week. "With oil at $150, we would have a global recession."
It is hard to believe what happened. Just hours after that historic announcement a year ago, Trump quickly backtracked, overwhelmed by market declines and pressure on his bonds. He improvised an extension and then another, said everything was going as planned, boasted of successful negotiations, many of them completely invented, raised and lowered thresholds, and through sticks and carrots, sat down at the table, one by one, with all countries. Resigned to a horrible scenario to avoid a catastrophic one, resigned to the impossibility of clashing with the richest and most powerful country.
The passage of time has not healed any wounds, it has only made everything worse. A few weeks ago, the U.S. Supreme Court overturned that tariff fever, saying that the White House exceeded its powers and could not use the legal apparatus it invoked to impose restrictions right and left. Trump, furious, lashed out at the judges, several of whom were appointed by himself, with brutal epithets. The same ones he uses every day for Jerome Powell, another chosen by himself in his first term. The Federal Reserve, suffering the greatest attacks on its independence ever seen (including insults, threats, lawsuits, and defamation campaigns) has weathered the storm more poorly than well with a few interest rate cuts, now interrupted again. Their warnings, their helplessness, their analyses reflect the situation well.
Job creation has slowed, inflation is not at all under control, public debt and the deficit are soaring, gasoline prices have increased by 25%, mortgage costs are rising, and the country's growth has stalled. All while the Middle East is in flames, oil is going crazy, and sanctions are being lifted on Russia and Iran themselves in desperation. Uncertainty has become the baseline scenario and the emperor dances. He literally did so this Friday, talking about yellow tractors, just a few meters from where he proclaimed protectionist victory 12 months ago.
Two universes coexist at the same time. The first is the one in which the president lives, or at least the one he describes over and over again. One where everything has gone well for him and success is complete. "Today our border is secure, our spirits have been restored, inflation is collapsing, incomes are rapidly increasing, the economy is booming like never before, our enemies are terrified, our armed forces and police are well-equipped, and America is respected again, perhaps like never before," he said in his highly anticipated first State of the Union speech at the end of February in the Capitol. A few days later, he ordered massive bombings in Iran, once again shaking the global stage. And yet, he continues to claim that everything is more than fine.
"My administration has reduced underlying inflation to the lowest level in over five years. And in the last three months of 2025, it dropped to 1.7%. Gasoline, which reached over $6 per gallon in some states during my predecessor's term and, frankly, was a disaster, is now below $2.30 per gallon in most states, and in some places at $1.99 per gallon, and continues to drop rapidly. The annual cost of a typical new mortgage has dropped nearly $5,000 since I took office a year ago. And lower interest rates will solve the housing problem created by Biden (...)" insists the president.
Trump seems indifferent to employment data (barely 181,000 jobs added in 2025), to a few tenths of growth or wages (which have grown minimally), but very sensitive to bond yields and Wall Street's performance. When the country's 10-year debt started to be more expensive than the 30-year debt in April 2025, he hit the brakes. Now, the markets are stirring again.
Throughout much of the war in Iran, investors clung to anything. As long as the conflict ended quickly, they said, the optimism inflated by AI could still be sustained. On Friday, with another drop (-1.7%), the S&P 500 marked its worst week since the start of the war. The fifth consecutive week in the red. The worst streak since the pandemic. The worst month since March 2025, when sales spiked precisely due to fear of Liberation Day. So far, investors had held onto the boom of artificial intelligence, to the fact that despite all the chaos the economy continues to grow, and to good business data. It seems that this optimism, almost desperate, is starting to fade and that the markets are discounting that the chaos in Iran will not end soon.
In one year, Trump has broken alliances, offended friends and enemies, multiplied uncertainty, encouraged protectionism, disrupted supply chains, and ultimately, with the attack on Iran, crushed the oil, gas, or fertilizer market. Without natural gas, it is impossible to produce ammonia or urea, leading to devastating effects on crops. In Somalia, the prices of basic food have increased by around 20% since the conflict in Iran began, according to the UN World Food Program.
All this for very little in return. Debt and public deficit continue to rise at unsustainable rates, and the US has to refinance 10 trillion dollars of its outstanding balance this year. A bad auction could trigger panic throughout the system.
Moreover, the failure of his trade strategy is evident. Not only for destroying the multilateral system that the US built after World War II. Not even due to the Supreme Court decision and institutional crisis. The annual trade data for 2025 show that even by Trump's own standards, they have not achieved the absurd goal of achieving trade balance with all actors and sinking Beijing. The country's goods trade deficit grew by 2.1% last year to $1.23 trillion, its historical maximum. Far from decreasing, US imports increased by 4.5% (or $145 billion). Including services, the US's strong suit, the US deficit only decreased by 0.2%, nothing.
According to data from the Kiel Institute and the Federal Reserve, US companies and consumers have had to bear between 90 and 96% of the tariff costs, not foreign exporters. And to make matters worse, China, the major rival, had a global trade surplus of $1.2 trillion in 2025, the highest ever recorded by any country. This reveals that Washington's widespread pressures, threats, and blackmail did not prevent Chinese companies from finding new markets when the US closed theirs with prohibitive prices.
"Almost a year after Liberation Day, the damage caused by the reckless tariff agenda of the Trump administration is more than evident. It is important to emphasize that these measures did not achieve any of the intended results. The goods trade deficit reached a record high last year; the manufacturing sector gains made under the Biden administration have been reversed, and working-class wages are stagnant compared to previous increases," explains the Center for American Progress in a recent analysis.