This month marks the year anniversary of Donald Trump’s Liberation Day, when the U.S. President launched a trade offensive against the world.

On April 2, 2025, Trump imposed tariffs on dozens of nations, sharply raising the U.S. average effective tariff rate.

His stated objective was to rebuild domestic manufacturing, reduce the U.S. trade deficit and “make America rich again.”

A year later, in a review of the impacts of this “historic trade upheaval,” Ethan Currie, economist with National Bank of Canada, finds the initiative has fallen short on all of those fronts.

The United States collected over US$340 billion from tariffs over the past 12 months, a 230 per cent increase from the year before, but recently that revenue has decelerated, said Currie.

Trump lost his main tariff tool in February when the Supreme Court ruled the President did not have the authority under the International Emergency Economic Powers Act (IEEPA) to impose them.

With the Liberation Day tariffs ruled invalid, the United States now faces having to pay up to US$175 billion in refunds.

Add to this the price tag of the ongoing Iran war estimated at US$36 billion per month and America’s shaky finances are under even more pressure, said Currie.

Nor has the U.S. trade deficit improved much, he said. In fact it widened in February by almost five per cent as goods imported into the country rose to an almost year high.

Gauging progress on industrial reshoring takes time, but Currie said a range of indicators suggest tariffs are not delivering their intended results.

Manufacturing has shed 120,000 jobs over the past 14 months, only posting a gain in January of this year. Weakness in the sector can also be seen in business and consumer readings and Purchasing Managers’ Index (PMI) surveys, he said.

“One year on, many corners of the U.S. economy appear far from liberated by White House standards,” said Currie.

The trade war, however, has left “visible scars” on Canada, said Douglas Porter, chief economist at BMO Capital Markets. Job growth has stalled over the past year and manufacturing output has dropped 4 per cent in the past three months. Canadian exports to the U.S. have plunged to 66.4 per cent, down 10 percentage points.

Still Canada’s economy has “managed to keep its head above water,” showing moderate gains to start this year, he said.

And despite the serious wobble in stock markets directly after Liberation Day, the TSX has soared 30 per cent since then.

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Uh-oh, we may have to wait longer for an end to the war in the Middle East if the prediction market is any indication. National Bank of Canada’s chart shows the biggest odds on Polymarket right now are on a ceasefire not coming until the end of June.

The outlook for everything from oil prices to the global economy hinges on when the war ends. Now in its 39th day, the longer the conflict continues, the more damage is done.

Three more months of war could send Brent crude oil prices to US$200 a barrel, and push the global economy toward recession, Macquire Group Ltd. said in a note to clients.

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