One year ago today, Donald Trump stood in the White House Rose Garden and declared April 2, 2025 "Liberation Day." He unveiled the most sweeping tariff package since the Smoot-Hawley Act of 1930 — a universal 10% tax on all imports, with rates up to 50% on major trading partners. Markets collapsed. Supply chains froze. A Supreme Court eventually struck down the core tariffs as unconstitutional.
Now it is April 2026. The tariffs are technically dead. But their economic consequences are very much alive — and a fresh round is already underway. Here is an honest accounting of what happened and what it means for inflation right now.
What Actually Happened — The Data
The Trump administration's theory was straightforward: high tariffs would force trading partners to negotiate, bring manufacturing back to the US, and raise revenue to fund tax cuts. A year later, the results are mixed at best.
Food prices hit hardest
The Liberation Day announcement alone drove food prices up 1.6% — the equivalent of an entire year of prior grocery inflation — in a matter of weeks. All 2025 tariff actions combined pushed food prices up 2.8% and fresh produce up 4%. Sugar and sweets are up 5.7% year-on-year through January 2026. Economists estimate tariff effects reach consumers with a 12–18 month lag, meaning peak pressure hits between April and October 2026. The worst is not over.
China did not capitulate — it adapted
US imports from China fell sharply. By mid-2025, they had halved from prior peaks, hitting 2009-crisis lows. But China did not lose — it rerouted. Exports moved through Vietnam, Mexico, and Southeast Asia. China ended 2025 with a record $1.2 trillion global trade surplus. The tariffs largely redirected supply chains rather than reshoring them.
The Supreme Court ruling and what comes next
In February 2026, the Supreme Court affirmed that Trump's use of IEEPA emergency powers to impose tariffs was unconstitutional. The refund process is now underway — CBP expects to begin accepting claims by April 20, 2026. But the Trump administration has already launched Section 301 investigations into 12+ countries including China, the EU, Japan, and India — a precursor to new tariffs under different legal authority. On April 2, 2026, Trump signed an executive order imposing 100% tariffs on imported pharmaceuticals. The tariff era is not over. It is changing tools.
The American Exceptionalism Reckoning
Perhaps the most significant long-term consequence of Liberation Day is one that does not show up in any trade statistic: the reassessment of US assets by global investors.
In the year since Liberation Day, Brazil, the UK, and Japan's benchmark indexes have all outperformed the S&P 500. Investors — particularly those outside the US — have begun diversifying away from an overreliance on American returns. "Tariffs and strong-arm trade tactics, challenges to Fed independence, military incursions, and saber-rattling over Greenland are combining with lofty valuations and a soaring deficit," one analyst wrote. "Investors are reassessing the narrative of American exceptionalism."
For the global economy, this matters enormously. A weaker dollar and reduced confidence in US assets as the world's safe haven increases the attractiveness of gold — which helps explain why gold hit a record $4,682 in March 2026.
What This Means for Inflation in 2026
Three tariff channels are still actively pushing prices higher right now:
- Lagged consumer impact: Economists' 12–18 month lag means April–October 2026 is peak pass-through. Grocery prices, electronics, and clothing are all still rising from 2025 tariff actions.
- New pharmaceutical tariffs: Trump's April 2, 2026 executive order imposes 100% tariffs on imported drugs. The US imports roughly 80% of its pharmaceutical ingredients — primarily from India and China. Drug prices will rise, and they will rise faster than groceries because pharmaceutical pricing power is higher.
- Section 301 investigations: New tariffs on China, EU, Japan, Switzerland, and India are in the pipeline. These will target technology and advanced manufacturing — sectors where supply chains cannot reroute quickly.
The WTM's trade signal does not distinguish between "old tariffs" and "new tariffs." It measures the aggregate disruption to global trade flows. Right now, that disruption is at 90/100 — and rising.