Written by Udit MisraNew Delhi | October 31, 2025 12:58 PM IST 4 min readA cartoon depicting U.S. President Donald Trump is seen to oppose a planned his visit near the U.S. Embassy in Seoul, South Korea, Tuesday, Oct. 28, 2025. (AP Photo/Ahn Young-joon)Since taking office, US President Donald Trump has been slapping tariffs as the central policy tool to “Make America Great Again”. But have they helped matters? Far from it.The latest analysis from researchers at the Yale Budget Lab, which has been closely tracking the Trump tariffs and their impacts on different aspects of the United States’ economy as well as the rest of the world, suggests that, as things stand, the US may be the worst affected by the Trump tariffs.Tariffs are a tax levied by the domestic government, in this case the US government, on its own citizens for importing goods from the rest of the world. Even though tariffs are often put up on the pretext of making the domestic economy stronger, traditional economic wisdom suggests that putting up tariffs often hurts the domestic economy.However, President Trump has openly defied the traditional caution under the mistaken notion that tariffs are paid by the citizens of foreign countries. He points to the billions of dollars collected in tariff revenues as proof that this policy is working without realising that bulk of this money is essentially paid by US consumers and US companies that are importing goods from the rest of the world.The YBL data summarised in the CHART alongside shows how Trump’s tariffs have affected some of the major economies in the world. CHART.The first big takeaway is that the US is the worst affected. US real GDP growth is half a percentage point lower than what it could have been both in 2025 and 2026. Moreover, as things stand, over the longer term, YBL calculates that in any given year, the US GDP would be 0.35 percentage points lower than what it would have been without the effects of tariffs.In hard money terms, 0.35% of US GDP is around $105 billion — that’s around 30% of Pakistan’s total GDP. In Indian rupees that’s a loss of Rs 9.3 lakh crore — pretty close to all the money the Indian government spends on capital expenditure to boost the productive capacity of the country.Story continues below this adAlso from this author | ExplainSpeaking | The lingering worry for India’s growth: Tepid investments by private sectorThe other country that will take a big hit — albeit only half as bad as the US — is China. Trump’s tariffs will persistently shave off 0.18 percentage points from China’s long run GDP. So, the biggest two economies in the world will be the worst affected, and perhaps this recognition has driven their increased engagement even in the middle of the tariff wars. Just yesterday, Trump and Chinese President met in South Korea to discuss trade issues, among other things.On aggregate, the rest of the world will also be adversely affected but the damage is lower if one takes away the US from the equation.There are some winners in this process: the UK and European Union. It is noteworthy that while these two regions are trade competitors of the US, they are also strong military allies.Amongst its neighbours with whom the US has a free trade agreement, it is Mexico that has been able to turn the tariffs tsunami in its favour, while Canada has suffered. The fact that US and Canada leaders are often quarrelling with each other, often leading to diplomatic rows while very little is heard from the Mexico-US diplomatic front, could be a signal why the fortunes differ.Udit Misra is Senior Associate Editor. Follow him on Twitter @ieuditmisra ... Read More© The Indian Express Pvt Ltd