Opinion

Are America’s Tariffs Here to Stay? One Year Into Trump’s Second Term

Published

6 months ago

January 14, 2026

One year into President Donald Trump’s second term, the landscape of global trade has undergone a profound transformation. The United States, long the steward of the post-1945 liberal economic order, has pivoted decisively toward a protectionist stance. Tariffs—once deployed selectively—have become a central instrument of economic statecraft, applied broadly to adversaries and allies alike. Average effective tariff rates have risen to levels not seen in over a century, generating substantial federal revenue while prompting retaliatory measures, supply-chain reconfiguration, and heightened geopolitical friction.

Policymakers, researchers, and think tank analysts now confront a pivotal question: are Trump tariffs permanent, or do they represent negotiable leverage that could recede with shifting political or economic pressures? As of mid-January 2026, the evidence points toward entrenchment, though important caveats remain.

Are America’s Tariffs Here to Stay? A Preliminary Assessment

The short answer is yes, in substantial part—with meaningful qualifications. Indicators strongly suggest that many of Trump’s second-term tariffs are likely to endure beyond the current administration:

Fiscal entrenchment — Tariff revenue has emerged as a significant budgetary resource, with collections exceeding $133 billion under IEEPA-based measures alone through late 2025 .
Bipartisan acceptance of China-specific measures — Restrictions on Chinese imports enjoy broad support across the U.S. political spectrum and are increasingly viewed as permanent features of national security policy .
Legal and institutional path dependence — Once imposed under executive authorities like the International Emergency Economic Powers Act (IEEPA), tariffs create domestic constituencies—protected industries and revenue-dependent programs—that resist rollback .
Geopolitical recalibration — The tariffs signal a lasting shift toward “America First” realism, prioritizing bilateral deals over multilateral rules .

Countervailing risks include ongoing Supreme Court litigation over IEEPA’s scope . What’s striking is how quickly tariffs have moved from campaign rhetoric to structural reality.

The Evolution of Tariffs in Trump’s Second Term

Trump’s second-term trade policy builds on—but dramatically expands—first-term actions. Where Section 301 and Section 232 authorities dominated previously, the administration has leaned heavily on IEEPA to justify sweeping measures .

Legal Foundations and IEEPA Expansion

In early 2025, President Trump invoked IEEPA to declare national emergencies tied to trade deficits, fentanyl inflows, and unfair practices, enabling broad tariff implementation .

Key Tariff Actions by Country and Issue

The administration has calibrated tariffs variably:

Trading Partner/Issue	Initial Rate (2025)	Current Rate (Jan 2026)	Rationale & Status
China	Up to 60-145% on many goods	High rates persist with some adjustments	National security, fentanyl, trade practices; partial deals in place
Canada & Mexico	25% on select goods	Largely moderated after negotiations	Migration and fentanyl; most trade under USMCA exemptions
European Union	Reciprocal + additional layers	Reduced in some sectors post-talks	Trade imbalances
Countries trading with Iran	25% additional	Active secondary measures	Pressure on Iran
Global baseline	10-20% universal/reciprocal	Partial exemptions remain	Persistent deficits

These actions reflect a strategic blend of punishment and leverage .

Economic Impacts: Revenue Gains Versus Broader Costs

The most immediate outcome has been revenue. Customs duties have reached historic highs, with projections of sustained hundreds of billions annually .

Revenue Projections (Selected Estimates)

Source	2025 Actual/Estimate	2026 Projection	Longer-Term
Tax Foundation	$143–200+ billion	Sustained high	$2+ trillion over decade
Reuters/CBP data	~$133–150 billion (IEEPA portion)	Dependent on court ruling	Potential refunds at risk
Brookings	Variable by exemption	Regressive effects noted

Yet costs are nontrivial. Economists note higher consumer prices and regressive impacts .

Geopolitical Consequences: Reshaping Alliances and Global Order

The tariffs have accelerated fragmentation of the rules-based system. Allies are diversifying ties, while adversaries adapt .

The Iran-related secondary tariffs exemplify broader economic coercion .

Key Indicators of Permanence

Several factors favor longevity:

Revenue dependence — Hard to forgo sustained fiscal inflows .
National security framing — Especially versus China .
Domestic winners — Protected sectors investing in capacity .
Precedent — Fallback authorities beyond IEEPA .

Potential Counterforces and Risks

Challenges include Supreme Court review .

Implications for the Global Economic Order

Permanent elevated tariffs would cement fragmentation, with higher costs and bifurcated chains .

Policy Recommendations for Stakeholders

U.S. policymakers — Complement tariffs with industrial incentives.
Allied governments — Accelerate diversification .
Corporations — Build resilience.
Researchers — Study long-term distributional and comparative effects.

In conclusion, while adjustments are likely, the core of Trump’s second-term tariffs appears structurally entrenched. This economic nationalism offers fiscal and strategic payoffs—but substantial risks. Navigating it will shape global governance for decades.

References

Brookings Institution. (n.d.). Back to the brink: North American trade in the 2nd Trump administration. https://www.brookings.edu/articles/back-to-the-brink-north-american-trade-in-the-2nd-trump-administration

Brookings Institution. (n.d.). Key takeaways on Trump’s reciprocal tariffs from recent Brookings event. https://www.brookings.edu/articles/key-takeaways-on-trumps-reciprocal-tariffs-from-recent-brookings-event

Brookings Institution. (n.d.). Recent tariffs threaten residential construction. https://www.brookings.edu/articles/recent-tariffs-threaten-residential-construction

Brookings Institution. (n.d.). Tariffs are a particularly bad way to raise revenue. https://www.brookings.edu/articles/tariffs-are-a-particularly-bad-way-raise-revenue

Brookings Institution. (n.d.). Trump’s 25% tariffs on Canada and Mexico will be a blow to all 3 economies. https://www.brookings.edu/articles/trumps-25-tariffs-on-canada-and-mexico-will-be-a-blow-to-all-3-economies

Council on Foreign Relations. (n.d.). National security costs of Trump’s tariffs. https://www.cfr.org/article/national-security-costs-trumps-tariffs

Council on Foreign Relations. (n.d.). Tariffs on trading partners: What can the president actually do? https://www.cfr.org/report/tariffs-trading-partners-can-president-actually-do

Council on Foreign Relations. (n.d.). Trade trends to watch 2026. https://www.cfr.org/article/trade-trends-watch-2026

Council on Foreign Relations. (n.d.). Trump imposes new Iran tariffs. https://www.cfr.org/article/trump-imposes-new-iran-tariffs

Council on Foreign Relations. (n.d.). Trump’s new tariff announcements. https://www.cfr.org/article/trumps-new-tariff-announcements

Foreign Affairs. (n.d.). America needs economic warriors. https://www.foreignaffairs.com/united-states/america-needs-economic-warriors

Foreign Affairs. (n.d.). The case for a grand bargain between America and China. https://www.foreignaffairs.com/united-states/case-grand-bargain-between-america-and-china

Foreign Affairs. (n.d.). How Europe lost. https://www.foreignaffairs.com/united-states/how-europe-lost-matthijs-tocci

Foreign Affairs. (n.d.). How multilateralism can survive. https://www.foreignaffairs.com/south-america/how-multilateralism-can-survive

Foreign Affairs. (n.d.). The new supply chain insecurity. https://www.foreignaffairs.com/united-states/new-supply-chain-insecurity-shannon-oneil

Reuters. (2026, January 6). U.S. tariffs that are at risk of court-ordered refunds exceed $133.5 billion. https://www.reuters.com/world/us/us-tariffs-that-are-risk-court-ordered-refunds-exceed-1335-billion-2026-01-06

Reuters. (2026, January 8). Importers brace for $150 billion tariff refund fight if Trump loses Supreme Court. https://www.reuters.com/legal/government/importers-brace-150-billion-tariff-refund-fight-if-trump-loses-supreme-court-2026-01-08

Reuters. (2026, January 8). Market risk mounts as Supreme Court weighs Trump’s emergency tariff powers. https://www.reuters.com/legal/government/market-risk-mounts-supreme-court-weighs-trumps-emergency-tariff-powers-2026-01-08

Tax Foundation. (n.d.). IEEPA tariff revenue, Trump, debt, economy. https://taxfoundation.org/blog/ieepa-tariff-revenue-trump-debt-economy

Tax Foundation. (n.d.). Trump tariffs revenue estimates. https://taxfoundation.org/blog/trump-tariffs-revenue-estimates

Tax Foundation. (n.d.). Trump tariffs: The economic impact of the Trump trade war. https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war

Tax Foundation. (n.d.). Universal tariff revenue estimates. https://taxfoundation.org/research/all/federal/universal-tariff-revenue-estimates

The Economist. (2025, November 12). America is going through a big economic experiment. https://www.economist.com/the-world-ahead/2025/11/12/america-is-going-through-a-big-economic-experiment

The Economist. (2025, November 12). Global trade will continue but will become more complex. https://www.economist.com/the-world-ahead/2025/11/12/global-trade-will-continue-but-will-become-more-complex

The Economist. (2026, January 6). America’s missing manufacturing renaissance. https://www.economist.com/finance-and-economics/2026/01/06/americas-missing-manufacturing-renaissance

The Economist. (2026, January 8). Do not mistake a resilient global economy for populist success. https://www.economist.com/leaders/2026/01/08/do-not-mistake-a-resilient-global-economy-for-populist-success

The Economist. (n.d.). Are America’s tariffs here to stay? https://www.economist.com/insider/inside-geopolitics/are-americas-tariffs-here-to-stay

The New York Times. (2026, January 3). Trump tariffs prices impact. https://www.nytimes.com/2026/01/03/business/economy/trump-tariffs-prices-impact.html

The New York Times. (2026, January 13). China trade surplus exports. https://www.nytimes.com/2026/01/13/business/china-trade-surplus-exports.html

The New York Times. (2026, January 13). Trump Iran tariffs trade. https://www.nytimes.com/2026/01/13/world/middleeast/trump-iran-tariffs-trade.html

The New York Times. (2026, January 14). Trump tariffs economists. https://www.nytimes.com/2026/01/14/us/politics/trump-tariffs-economists.html

The Wall Street Journal. (n.d.). Trump predicts strong economic growth in 2026 during speech in Detroit. https://www.wsj.com/politics/policy/trump-predicts-strong-economic-growth-in-2026-during-speech-in-detroit-71a5a19d

The Wall Street Journal. (n.d.). What to know about Trump’s latest tariff policy moves. https://www.wsj.com/economy/trade/what-to-know-about-trumps-latest-tariff-policy-moves-8d9f8b37

BBC News. (n.d.). Article on Trump tariffs and global trade. https://www.bbc.com/news/articles/cwynx4rerpzo

BBC News. (n.d.). Article on Trump tariffs economic effects. https://www.bbc.com/news/articles/czejp3gep63o

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Digital

UK Digital Identity Framework 2026: The £5bn Plan to Reshape Financial Verification

Published

1 day ago

July 10, 2026

Abdul Rahman

The City of London Corporation has proposed a digital identity framework it says could unlock more than £5 billion for the UK economy, reshaping how consumers verify themselves across financial services, according to CPA’s UK business news briefing for July 1, 2026.

How the Digital Verification Orchestrator Would Work

The proposed Digital Verification Orchestrator would allow consumers to reuse verified identity information across multiple financial-services providers, eliminating the need to repeat identity checks each time a customer opens a new account, applies for credit, or switches providers. The framework has been developed jointly with EY and Hogan Lovells, with input from the Financial Conduct Authority (FCA), positioning it as a industry-government collaboration rather than a purely private initiative.

The Numbers Behind the Pitch

Proponents estimate the model could generate £1.8 billion in direct economic value while reducing fraud losses by £3 billion over five years — a combined benefit that would help offset the broader £5 billion opportunity cited by the City of London Corporation. The fraud-reduction component is particularly significant given that identity-related fraud has become one of the fastest-growing categories of financial crime across UK banking, insurance, and lending sectors, driven partly by increasingly sophisticated synthetic-identity schemes.

Timing Against a Weakening Consumer Backdrop

The proposal lands at a moment when UK consumer financial stress is rising on other fronts. A Bank of England credit survey found the balance of lenders reporting higher unsecured-loan default rates jumped to 34 percentage points in the second quarter of 2026, up from 18 points in Q1 — the highest reading since 2009, according to CPA’s July 3, 2026 briefing. Lenders expect unsecured defaults to climb further, a trend regulators attribute to rising unemployment, elevated borrowing costs, and inflation that remains above the Bank of England’s 2% target. Reducing friction and fraud in identity verification is being framed by proponents as one lever — among several needed — to help lenders manage credit risk more efficiently during this period of rising defaults.

A Parallel Push on Late Payments

The digital-identity proposal is emerging alongside a separate push to reform commercial payment practices. A study from the Enterprise Research Centre found that a proposed Commercial Payments Bill would introduce the strictest late-payment laws of any major economy, including a 60-day payment cap, mandatory interest on overdue invoices, and expanded powers for the Small Business Commissioner, targeting an estimated £26 billion in overdue invoices currently affecting UK small businesses, according to the same CPA reporting. Together, the two initiatives reflect a broader UK policy push to modernize financial-services infrastructure at a moment when both consumer credit stress and small-business cash-flow pressure are intensifying.

What Comes Next

Neither the digital-identity framework nor the Commercial Payments Bill has a confirmed legislative timetable, but both are being positioned as flagship reforms for whoever occupies 11 Downing Street heading into the next fiscal cycle. For UK fintechs, banks, and insurers, the Digital Verification Orchestrator in particular represents a potentially significant shift in customer-acquisition economics if adopted at scale, reducing onboarding costs that currently fall disproportionately on smaller financial-services entrants competing against incumbent banks with established verification infrastructure.

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Growth

Indonesia GDP Growth 2026: 5.61% Expansion Marks Fastest Pace in Three Years

Published

6 days ago

July 5, 2026

Abdul Rahman

Indonesia’s economy expanded 5.61% in the first quarter of 2026, its fastest pace in more than three years, driven by a surge in government spending and household consumption during the Eid festive period, according to McKinsey’s Southeast Asia quarterly economic review.

Consumption Does the Heavy Lifting

Household consumption, which accounts for just over half of Indonesia’s total economic activity, recorded its fastest growth since 2022. The strength came even as export growth continued to moderate, with external demand weakening under the drag of the Middle East conflict. The Indonesian government expects growth to accelerate further in the coming quarters to reach 5.4% for full-year 2026, while Bank Indonesia forecasts a wider range of 4.9% to 5.7%.

A Central Bank Playing Defense on the Currency

Bank Indonesia has held its benchmark policy rate steady at 4.75% for a seventh consecutive meeting through April 2026, prioritizing rupiah stability over further easing amid external volatility. The central bank has signaled readiness to step up both onshore and offshore foreign-exchange intervention to curb currency weakness and keep inflation within its 2026–2027 target range, according to reporting cited in McKinsey’s Q1 2026 review. The central bank anticipates inflation will remain manageable despite rising global costs, suggesting policymakers see room to hold their current stance through the rest of the year.

Foreign Investment Keeps Flowing

Foreign direct investment into Indonesia grew for a second consecutive quarter, rising 8.1% to 249.9 trillion rupiah (approximately $14.5 billion) in the first quarter of 2026. Singapore remained the largest single source of that capital at $4.6 billion, followed by China, Japan, Hong Kong, and the United States — a distribution that underscores Indonesia’s continued pull for regional and global manufacturing and services investment even as global capital allocation grows more selective.

Tourism’s Volume-Versus-Value Problem

Indonesia’s tourism sector, anchored by Bali, illustrates a structural tension playing out across the archipelago’s growth story. Bali continues to draw strong visitor volumes, but its tourism economy remains heavily dependent on mass-market travel, which caps per-visitor spending and strains infrastructure and accommodation capacity. Official Indonesian tourism frameworks are now pushing for value-based restructuring, according to Travel and Tour World’s ASEAN tourism analysis, as Bali seeks to close the premium-segmentation gap with rivals such as Singapore and Bangkok.

Regional Context: A Leader, Not an Outlier

Indonesia’s growth places it among the strongest performers in the ASEAN bloc for early 2026, alongside Singapore and Vietnam, while Malaysia and Thailand expand at a steadier pace and the Philippines lags on domestic challenges. The Asia House Annual Outlook projects broader Asian growth moderating slightly in 2026 but still outperforming the global average, with strong consumer demand across Indonesia, Malaysia, the Philippines, Thailand, and Vietnam supported by accommodative fiscal and monetary policy, rising wages, and increasing remittance flows, according to Asia House’s 2026 outlook. For a country of Indonesia’s scale — Southeast Asia’s largest economy — sustaining this consumption-led momentum through 2026 will be critical to the region’s overall growth trajectory.

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Singapore

Singapore Makes Its Move to Become Asia’s Precious-Metals Capital

Published

6 days ago

July 5, 2026

Abdul Rahman

Singapore is launching a gold clearing system in a bid to establish itself as a regional hub for precious-metals trading, a move that positions the city-state to compete directly with established centers in London, Zurich, and Shanghai, according to Wikipedia’s economy of Singapore overview.

Why Gold, and Why Now

The timing is not accidental. Gold has drawn heightened investor interest throughout 2026 as a hedge against both the Middle East conflict’s disruption to energy and shipping markets and the broader uncertainty introduced by shifting US trade policy and tariff escalation. Singapore’s move to build institutional clearing infrastructure for gold — and potentially silver, palladium, platinum, and diamonds — reflects an attempt to capture a larger share of the safe-haven capital flows that have historically routed through London and Zurich vaults.

Building on an Existing Trade Powerhouse

The gold initiative extends a trading base that is already substantial. Singapore’s principal exports include electronic components, refined petroleum, gold, computers, and packaged medications, with China standing as its largest trading partner — bilateral trade totaled roughly 175 billion Singapore dollars as of the most recent full-year data. Singapore has run an export surplus with China since 2009, while maintaining an import surplus in its trade relationship with the United States since 2006, a dual-facing trade structure that has long underpinned its role as a regional entrepôt.

A Regional Growth Leader Facing New Competition

Singapore is among the strongest-performing economies in Southeast Asia this year. McKinsey’s Southeast Asia quarterly economic review places Singapore alongside Indonesia and Vietnam as the region’s growth leaders in early 2026, even as momentum has softened somewhat from the late-2025 peak, according to McKinsey’s Q1 2026 regional review. Singapore was also the largest single foreign investor into Indonesia in the first quarter of 2026, contributing $4.6 billion of the $14.5 billion in total foreign direct investment Indonesia received.

Tourism Rivalry Adds a Second Front

Singapore’s broader economic positioning is also being tested in tourism, where it is locked in what one industry analysis calls a “brutal regional rivalry” with Bangkok, Bali, and Kuala Lumpur for high-value visitor spending. Singapore continues to show strong inbound recovery driven by business travel and premium tourism demand, even as spending patterns soften in mid-market segments across the wider region, according to Travel and Tour World’s ASEAN tourism analysis. Industry data frames the 2026 competitive dynamic as one where revenue efficiency per visitor, rather than raw arrival numbers, increasingly determines which regional hub captures the most value.

The Strategic Logic

Both moves — the gold clearing system and the defense of premium-tourism positioning — reflect a consistent Singaporean strategy: compete on institutional quality and value density rather than volume. As global capital searches for safe-haven assets and premium services amid elevated geopolitical risk, Singapore’s bet is that deep, trusted financial infrastructure will continue to draw disproportionate flows regardless of which way regional growth cycles turn.