he New York Federal Reserve released a report earlier this week that found Americans are eating the majority (90%) of the cost of Trump’s tariffs. They concluded that over the course of 2025, the average tariff rate on U.S. imports increased from 2.6 percent to 13 percent.
On Wednesday, President Trump boasted on social media that the U.S. trade deficit had been reduced by 78 percent thanks to his comprehensive tariff regime. Talk about bad timing. Less than twelve hours later, the Census Bureau published its annual trade report. It reveals that the U.S. trade deficit declined by just 0.2 percent in 2025. The only reason that the overall trade deficit did not widen was that the U.S. economy also saw record high exports of both goods and services.
And then on Friday, new economic data showed sharply slower growth and that inflation came in hotter than expected. But, the final blow to the Trump administration was – the Supreme Court ruled on a 6-3 decision that tariffs imposed by Trump were illegal, ruling that he had overstepped his authority under that law. Trump, quickly reasserted himself by imposing tariffs that circumvented the previous law. The new global tariff is now 10%. This implies that those countries who had tariffs imposed on them that were higher than 10%, will now be lowered to 10%.
On the economic front, growth showed clear signs of cooling. The Bureau of Economic Analysis reported that U.S. GDP expanded at a 1.4% annualized pace in the fourth quarter of 2025, well below the prior quarter’s 4.4% rate and under consensus expectations of 2.8%.
For the week, the S&P gained 1.1%, while the Nasdaq moved up 1.5%, and the Dow advanced 0.3%.
Future Wealth’s View
The decision by the Supreme Court shows that the power of the institutions matter. While Trump took issue with the dissenting judges (who will now need extra security detail), we applaud the Supreme Court for curtailing the powers of a President who has gone rogue and did not have the interests of the American people in mind.
Wall Street celebrated the Supreme Court decision largely because everyone, except Trump, knew that US consumers were eating the cost of tariffs. Prices across the board have gone higher and data shows that lower income households are being hit the hardest. With tariffs now at a more manageable level of 10%, we view this decision to be a positive for the US economy and US consumer spending.
Just when we thought that we will no longer have to wake up to tariff tweets anymore, Trump tweeted Saturday morning that he is raising the global tariffs to 15%, just 24 hours after announcing at the widely watched press conference that global tariffs will be 10%.
If you are shaking your head, join the crowd.