President Donald Trump faces a lot of headwinds as he makes a visit to U.S. Steel Friday to argue that his approach to the economy is working.
Not only are Democrats and free trade-oriented Republicans criticizing him, but Trump also faces legal battles as he seeks to fundamentally rework U.S. trade policy during his second term.
“The United States has run a trade deficit of goods every year since 1975,” White House press secretary Karoline Leavitt said Thursday. “In 2024, our trade deficit in goods exceeded $1 trillion. Everybody agrees this is unacceptable. President Trump is delivering on his promise to fix this problem, and he has taken a long overdue and much-needed bold stance for American workers.”
But for Trump’s opponents, the economic news since Inauguration Day has been one setback after another, and talk of a recession has been a constant theme.
“Donald Trump’s failing agenda is skyrocketing prices, plummeting an already rocky job market, decimating small businesses, and costing thousands of Americans their jobs,” a Thursday statement from the Democratic National Committee reads. “And it’s set to get worse.”
Yet the underlying economic numbers do not paint a picture of failure or resounding success, at least not so far.
Inflation, which crippled Joe Biden’s presidency when it reached 9.1% in 2022 and remained elevated though the end of his term, was predicted to skyrocket due to tariffs. But in the last 12 months, prices have risen only by 2.3%, nearly down to the Federal Reserve’s 2% target rate.
The White House also points to other positives, such as falling gas prices and rising gross domestic investment, as proof that its unorthodox economics are paying dividends.
“Despite doomsday prophesizing by the ‘experts,’ President Trump’s America First economic agenda of tariffs, tax cuts, rapid deregulation, and domestic energy production continues to pay off,” White House spokesman Kush Desai said in a statement earlier this week.
U.S. Steel, where Trump will speak Friday, may be a test case for the Trump approach.
Trump announced last week that the Pittsburgh-based company would form a “partnership” with Japanese firm Nippon Steel, the culmination of months of negotiations over how to keep the industry American-owned and operated.
Nippon Steel initially wanted to buy U.S. Steel outright, but Trump and Biden both opposed the deal in a bid to win the crucial swing state of Pennsylvania in the 2024 election. Instead, Nippon will invest in U.S. Steel without taking it over.
“For many years, the name, ‘United States Steel’ was synonymous with Greatness, and now, it will be again,” Trump wrote on Truth Social.
The president predicted that the deal would create at least 70,000 jobs and inject $14 billion into the U.S. economy, and he credited his tariff policy with incentivizing the investment. Trump has imposed a 25% tariff on imported steel and aluminum, a duty that is not paid on domestically produced products.
But not everyone is convinced that Trump’s approach is working now or that it will work in the future.
Jeff Haymond, an economics professor at Cedarville University in Ohio, said the economy has been slowing down since Trump took office.
“Regardless of if you think Mr. Trump’s policies on trade may be beneficial in the long run, the short-run costs are clear and already impacting the economy, specifically in the area of new investment,” Haymond said. “Many firms are in a wait-and-see mode.”
Trump is likely to tout the benefits of his “big, beautiful bill” as well during his Pittsburgh speech, but Haymond argues those will mostly extend existing tax cuts and are thus unlikely to provide new stimulus to the economy.
A worrying sign is that gross domestic product declined slightly in the first quarter, and most economists consider two straight quarters of contraction to be a recession.
The decline in GDP is a notable shift from the final quarter of 2024, which saw economic output increase by 2.4%. It also marks the second time, joining one quarter in 2022, that the economy has contracted since the pandemic.
But some business-focused groups, such as the Job Creators Network, say Trump is doing a great job so far.
“President Trump’s pro-growth policies, including energy dominance and deregulation, have reversed the economic destruction under the Biden administration,” JCN CEO Alfredo Ortiz said. “The Senate must now follow the House’s lead and pass legislation expanding and making permanent the Tax Cuts and Jobs Act to empower American small businesses.”
His renegotiated trade deals, Ortiz added, will open up new markets for American small businesses.
Trump’s goal of eliminating the substantial U.S. trade deficit may be harder to read from an economic perspective. Many economists argue that trade deficits do not matter, and even proponents concede that doing so can cause short-term pain.
When the stock market fell on news of Trump’s “Liberation Day” tariffs, he compared the U.S. economy to a sick hospital patient recovering from an operation to get stronger.
He may make that case again Friday, and polls show that Trump’s approval rating has actually improved by about 2.5 points over the last month, placing him roughly where he was when the massive tariffs were announced on April 2.
Part of that recovery may be due to the fact that he has pulled many of the tariffs back, a strategy opponents deride as “Trump always chickens out” or TACO.
GDP revised up to -0.2% growth rate for first quarter
But a 10% universal tariff remains in place, along with a 30% duty on imports from China and other sector-specific tariffs. The White House says that its plan is working, an argument Trump will make himself today.
“President Trump is in the process of rebalancing America’s trading agreements with the entire world,” Leavitt said, “bringing in tens of billions of dollars in tariff revenues to our country, and finally ending the United States of America from being ripped off.”
