The U.S. economy seems immune to the turbulence created by Donald Trump. The first year of his second term in the White House has been fraught with upheaval due to his eagerness to impose a headlong agenda with a marked protectionist approach. Businesses are now inoculated against the vertigo and the uncertainty surrounding the Republican president.

Since winning the election against Democrat Kamala Harris exactly one year ago, he has changed the world trade order in one fell swoop; he has disrupted global supply chains, passed a law that he dubbed “Big and Beautiful” containing massive tax cuts for corporations, reduced public spending with the help of Elon Musk, laid off thousands of civil servants, championed cryptocurrencies, pressured multinationals to invest in the U.S., tightened immigration controls to unprecedented levels, and launched a campaign of harassment against the Chairman of the Federal Reserve in an attempt to further lower interest rates, among many other things.

Despite all this apparent upheaval, the domestic economy continues on its course a year after his electoral victory. Trump has shaken the global economy, but to the surprise of many, the activity of the world’s leading power continues to show good health: the stock market is at record highs, companies are increasing their profits, the trade deficit has narrowed, the budget imbalance is the smallest in three years, GDP is growing at an annualized rate of 3% although economists anticipate a slight slowdown, inflation is at 3%, far from the highs of two years ago, the unemployment rate is at 4.3%; and although job creation has deteriorated in recent months, analysts attribute this to a drop in supply, because there are fewer immigrants available to work.

There are obvious risks, such as a stock market bubble fueled by the artificial intelligence frenzy; or the evident growth of inequality, but the big macro figures underpin the strength of the U.S. economy.

A Reuters report on the first year of Trump 2.0 in power notes: “Investors are learning to ride out the unpredictability, including clear ways to trade Trump’s tendency to amp up threats only to later back down. The so-called TACO trade — ‘Trump always chickens out’ — has become a feature.“

There are numerous examples of this, but perhaps the most paradigmatic is his relationship with China. After imposing a 145% tariff in April, the Republican rushed to negotiate an agreement to avoid irreparable damage to both economies when the Asian giant responded with 125% trade countermeasures. Later that fall, he again tried to charge Beijing while limiting access to microprocessors, but in response, Xi Jinping threatened to cut off the supply of rare earth elements. Trump, enraged, threatened to sever relations and impose an additional 100% tariff. But his anger was short-lived. Two weeks later, the two leaders met to de-escalate the trade tensions.

“We have to look beyond Trump’s rhetoric and see the big picture,” says a financial analyst who knows the ins and outs of the U.S. economy. “The truth is, the U.S. economy is doing well, and that doesn’t seem likely to change anytime soon.”

To assess the extent to which Trump fulfilled his campaign promises and their impact on the U.S. economy, one must examine what has happened with tariffs, inflation, and the labor market. These are the three key ideas on which he defeated the Democrat Kamala Harris. And while the president’s theatrics have at times been worthy of a farce — recall the image of Trump in the White House gardens showing the world a rudimentary cardboard cutout of the tariffs he was going to impose — the truth is that he has caused no more damage to the global economy than a spring cold, for which it is already immune.

Tariffs, the new trade rules

April 2 was “Liberation Day,” as Trump dubbed the day he appeared before the world to announce indiscriminate tariffs on goods worldwide. The measure triggered anxiety in the markets for several days. The MSCI World stock index registered losses of 10% in just a few days, and U.S. Treasury bond interest rates soared. The tycoon who made his fortune through real estate speculation on the streets of New York had changed the rules of international trade with a single stroke, throwing decades of diplomacy to the wind. The stock market panic lasted barely a week and a half.

Leading international analysts were quick to worsen their forecasts. Some predicted a catastrophe, warning of a collapse in global trade and a return of inflation. But eight months later, the world keeps turning. “The tariff shock itself is smaller than initially feared,” acknowledged Kristalina Georgieva, managing director of the International Monetary Fund (IMF), a couple of weeks ago. The IMF notes that of 191 countries analyzed, 188 have avoided retaliatory tariff measures, thus preventing a trade war and stabilizing markets. “Despite all the turbulence, an estimated 72% of world trade is still being conducted on most-favored-nation terms: countries take their lowest bilateral tariff rate and offer it to all of their trading partners,” Georgieva explained.

The U.S. trade-weighted tariff rate has fallen from the 23% it reached on Liberation Day to the current 17%, a level that is still much higher than before (around 4%), but more moderate than in the first announcement.

One of the reasons for the resilience of the U.S. economy has been the adaptability of businesses. They brought forward imports in anticipation of the first tariff blow, built up their inventory, and strengthened their supply chains. Furthermore, the years of high profits following the Covid pandemic have allowed many to reduce their margins, which has cushioned the impact of the tariffs on prices.

The soft landing of inflation

A recent CNN poll reveals growing concern among Americans about the cost of living. Forty-seven percent of respondents identified the cost of living and the economy as the top concern facing the United States. “Americans are especially sensitive because the economy continues to elicit uncertainty,” notes another poll published by CBS that reached similar conclusions.

According to U.S. Federal Reserve Chairman Jerome Powell, consumers perceive prices as higher. “The reason they’re so unhappy about inflation is the inflation that we had in 2021, ’22, ’23, because you can say that prices aren’t going up as much, but that doesn’t mean people aren’t feeling those higher prices from the inflation we had two or three years ago, they are. It’s nice that prices are not going up as fast as they were, but they’re still much higher than they were. And it’ll take some time for that effect to wear off. As real incomes rise, it will feel better over time. But that’s going to take time,” he explained last week, allaying fears of a spike in inflation due to tariffs.

The truth is that workers’ incomes are rising and offsetting the price increases of the last few quarters. And although inflation rebounded to 3% in September, the Federal Reserve expects it to be temporary.

Meanwhile, Powell is being pressured by Donald Trump to resign because the Republican wants to lower interest rates more aggressively to further stimulate the economy with just a year to go before the midterm elections, which could curtail Trump’s power in Congress. But the chairman of the U.S. Federal Reserve is trying to balance the risks between inflation and the deteriorating labor market.

Artificial intelligence and work

Another key to the resilience of the U.S. economy in the face of Trump’s economic turmoil is the euphoria gripping Wall Street. Stock markets are at record highs, thanks primarily to the explosion of artificial intelligence (AI). Major technology companies like Amazon, Nvidia, Microsoft, Google and Meta are experiencing an investment frenzy to stay at the forefront of this technology. They are investing hundreds of billions in advanced microprocessors, data centers and power plants to supply these infrastructures. Investors don’t want to miss out on the stock market euphoria.

“The United States has the highest stock market participation rate in the world. Sixty percent of families invest,” a prominent Spanish banker stated in Washington two weeks ago. And, of course, if the stock market performs well, these investors see capital gains and increase their spending. “The rise of artificial intelligence is significantly boosting consumption thanks to the wealth generated in the technology sector over the past 12 months,” noted Bernard Yaros, an economist at Oxford Economics.

Those who own stocks are celebrating, but those who haven’t managed to save enough to invest in the stock market are having a much harder time. Inequality is rampant. And the layoffs of civil servants and workers replaced by automation are exacerbating it.

Job creation is noticeably slowing. Trump came to the White House promising to accelerate job creation, but at least in that respect, he is not delivering. The latest official data reveals that 22,000 jobs were created in August, well below expectations. The Bureau of Labor Statistics’ revision indicates that 13,000 jobs were lost in June, the first decline in employment in more than four years. The unemployment rate, however, remains stable at 4.3%, the highest since October 2021, but a historically low level. The labor market is also beginning to feel the effects of the changing economic model brought about by the adoption of AI.

“Despite the strong economic growth we saw in the second quarter, this month’s report further validates what we have been observing in the labor market: that U.S. employers have been cautious about hiring,” according Nela Richardson, chief economist at ADP, a private entity specializing in wage issues, which estimates that another 32,000 jobs were lost in September.

However, economic authorities are not worried. They attribute this situation to the tightening of Donald Trump’s immigration policies. He has deployed Immigration and Customs Enforcement (ICE) to conduct raids and arrest undocumented immigrants. Thousands of undocumented informal workers are leaving the labor market. The supply of labor is decreasing, but demand is also being contained to adjust costs due to tariffs. The combination of these two forces is keeping the unemployment rate constant.

Finally, the U.S. economy is feeling the effects of the government shutdown in the last quarter of the year. Republicans and Democrats have been unable to reach an agreement to extend the budget until December, which has resulted in dozens of federal agencies being closed or operating at a near standstill. These include economic analysis bureaus, which have plunged the country into a statistical blackout, as well as museums, national parks, and even air traffic controllers. Trump is taking advantage of this situation to lay off thousands of workers.

The Congressional Budget Office (CBO) has released a report estimating that the U.S. economy will lose between $7 billion and $14 billion due to the federal government shutdown. The report projects that the non-payment of federal workers and the disruption of food assistance for low-income citizens will temporarily reduce GDP by one to two percentage points in the fourth quarter of 2025, though it anticipates that most of this loss will be recovered once the government reopens.

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