Joe Biden’s presidency offers a good example. His administration spent hundreds of billions of dollars on subsidies, infrastructure and support for targeted industries, yet it failed to alter the trajectory of the US economy. Rather than addressing the underlying causes of America’s decline, Biden sought to cushion its effects with additional government spending. Instead of reforming the system, he chose to sustain it at an ever-increasing cost.

Donald Trump has shown a willingness to pursue the kind of structural changes his predecessors avoided. That is to his credit. He recognized that America’s problems had become too deep for another piecemeal intervention or another subsidy program. What was needed, in his view, was a fundamental overhaul.

Trump’s Tariff Offensive

Trump’s diagnosis centered primarily on the trade deficit. For decades, the US has imported more than it exports. The gap has been financed through borrowing and the sale of assets to foreign investors. In this broader sense, the country has been gradually becoming poorer – not because gross domestic product (GDP) or living standards have immediately declined, but because current consumption has been exchanged for future income, national assets and greater dependence on foreign capital.

This arrangement has been sustained by the exceptional appeal of US financial markets. Investors from around the world continue to buy American stocks, bonds and companies, allowing the United States to maintain a trade gap over the long term.

It is no coincidence that Trump has made artificial intelligence a national priority. If the US preserves its leadership in this field, it will continue to attract global investment into its companies, financial markets and the dollar. Technological superiority is therefore not simply a matter of prestige but a prerequisite for financing America’s persistent trade deficit.

Here lies the central contradiction within the “America First” agenda. Trump wants a more self-reliant America, less dependent on foreign manufacturers and suppliers. Meanwhile, he needs capital to keep flowing into the country from abroad. He wants to narrow the trade deficit while ensuring that foreign companies and investors continue buying American assets and building factories in the US.

His chosen instrument for resolving this contradiction was tariffs.

The logic was simple. Tariffs would make imports more expensive, increase government revenue and reduce the price advantage enjoyed by foreign manufacturers. American companies would receive greater protection in the domestic market, even if that alone would not make them more competitive or technologically advanced.

For foreign companies, the most reliable way to avoid tariffs is to relocate a significant share of production to the United States. That process takes years, requiring new factories, rebuilt supply chains and a trained workforce. Trump’s objective, nevertheless, was to set the economy on a new course by convincing companies that manufacturing in America could become more attractive than further expanding production in China.

On 2 April 2025, Trump proclaimed what he called “America’s Liberation Day”. In the days that followed, however, US stock markets lost a significant share of their value. Investors were alarmed not only by the scale of the tariffs but, above all, by the uncertainty and confusion surrounding their implementation. Trump eventually retreated from his initial demands and postponed the highest tariff rates.

The tariffs gradually evolved into a negotiating tool. Countries willing to make concessions to the United States could hope to secure lower rates.

Success on Paper

At first glance, Trump appeared to deliver on his promise. During the first half of 2026, the US trade deficit fell by roughly one-third compared with the same period a year earlier. It seemed, therefore, that the tariffs were beginning to produce results. A closer look painted a less convincing picture.

The first reason was statistical. Before the tariffs took effect, US companies had stockpiled imported goods on an unprecedented scale, pushing the trade deficit to a record high at the start of 2025. When imports later declined, the comparison created the appearance of an extraordinary improvement. In effect, Trump was measuring current figures against a distortion that his own tariff policy had helped create.

The second factor was oil and natural gas. Higher energy prices, together with rising exports of crude oil, refined petroleum products and liquefied natural gas, improved the US trade balance. Yet this had little to do with tariffs. Instead, it reflected global market conditions and export capacity built up over many years.

This produced an obvious paradox. Higher oil prices strengthened the trade balance, benefiting Trump politically, while directly contradicting his favored slogan, “drill, baby, drill”, which was intended to increase production and reduce fuel prices. In other words, his trade figures improved partly because of the higher energy prices his domestic policies sought to bring down.

Energy alone, of course, does not account for the entire decline in the trade deficit. While it made a significant contribution, most of the improvement came from other categories of goods. Even there, stockpiling, fluctuations in import volumes and shifts in trade routes played a major role. The tariffs improved the statistics far more quickly than they could rebuild American industry.

The rollout of the tariffs showed just how resilient the existing system had become. The first major setback came in the courts. In February 2026, the Supreme Court ruled that the president lacked the authority to impose blanket tariffs under the International Emergency Economic Powers Act (IEEPA). Of the roughly $165bn collected by the government, about $100bn had to be refunded by early August. The money was returned to importers rather than consumers, who had ultimately borne the higher prices.

The second setback was precisely what critics of the tariffs had predicted from the outset. The modern global economy bears little resemblance to that of Andrew Jackson, the US president who inspires Trump. Manufacturing is no longer confined within national borders but is spread across complex international supply chains. As a result, imposing tariffs on one country does not necessarily bring production back to the United States.

Tariffs on Chinese goods increased sharply and direct imports from China did decline. Yet the goods themselves did not disappear. Instead, trade shifted to Vietnam and other Southeast Asian countries. America did not stop buying Chinese-made products; it simply began importing many of them through different channels.

As a result, Trump's tariffs reduced the trade deficit with China but failed to eliminate the underlying problem. Much of the deficit simply shifted to Vietnam, Taiwan and other trading partners. The tariffs altered the geography of US imports far more quickly than they changed the structure of American industry.

This highlights their fundamental weakness. Making foreign products more expensive is far easier than rebuilding the factories, workforce and supply chains that the United States allowed to disappear over several decades.

By imposing tariffs, Trump sought to trigger a shock that would change the course of the US economy. Instead, he largely demonstrated how resilient the existing system had become. Supply chains adapted, financial markets forced concessions and the courts struck down part of his tariff agenda.

These partial successes should not be dismissed. Still, it is clear that restoring America's industrial base will take far longer than a single presidential term.

Trump can raise or lower tariff rates, pressure companies into negotiations and temporarily reshape trade statistics. Changing the course of history and redirecting an entire society is a far greater challenge – even for a man whose ego is large enough to believe he is the driving force behind it all.