In economic terms, 2025 has been an exciting ride. The equity and foreign exchange markets have been all over the place, with investors reacting to a blizzard of announcements from the White House and Mar-a-Lago: tariffs up, down, off, then back up again. There have been more twists and turns than one typically sees in an England–India test match. 

So it is worth reminding oneself what the net effect on the United States has been so far. Economic growth slipped in the first quarter of the year, apparently due to a rise in imports, the result of a rush to beat the expected tariff rises. The current consensus is that the economy will nonetheless grow by just under 2 per cent this year. That would represent a slowdown from the rapid clip seen under Biden (though much good that did him), but it would still mean the US economy is performing more strongly than most other developed economies. The stock market is up around 6 per cent, following a sharp fall around Liberation Day. Inflation is up a little, standing at 2.9 per cent year-on-year, above the Federal Reserve’s target but not shockingly so. Inflation in the UK is at 3.6 per cent, so we have no grounds to crow. Tariffs have had little impact so far, with the biggest impact traceable to the weak dollar, down 10 per cent since the inauguration. As for trade, imports are up 15 per cent on 2024, with exports also up, but by a mere 5 per cent. Tariff revenues are significantly higher, about $50 billion more than last year. 

One should keep these numbers in mind when entering Philip Coggan’s dystopian world. Here, Trump’s mercurial mercantilist agenda is destroying the global trading system we have come to know and love – and the American economy in the process. According to Coggan, Trump has ‘effectively neutered’ the World Trade Organization. That wasn’t tough to achieve. The World Trade Organization has not concluded a major trade deal since the Doha Round collapsed in 2011, well before Trump’s first election win, and the Appellate Body has been paralysed since 2019. To say that Trump ‘took an economy that had grown 2.8 per cent in the previous year and brought it to a halt’ credits him with supernatural powers. And to claim that ‘the stock market’s willingness to forgive Mr Trump is so naive that it is almost touching’ is a bit silly. The stock market does not have a single controlling mind.

I did not imagine when I picked up The Economic Consequences of Mr Trump that I would find myself saying, ‘hang on, old chap, has he done all that single-handedly?’ Nor did I expect to become a little defensive on the Orangeman’s account. That is a pity, as the core of Coggan’s argu­ment is sound. He points out that the US trade deficit, which so concerns Trump, is driven by persistent fiscal deficits, not by America’s trading partners somehow ‘cheating’. He cogently argues that the impact of tariffs will mainly be felt by US businesses and consumers (mostly in the lower-­income bracket), that the romantic notion of attracting more manufacturing jobs to the United States involves pushing water uphill and that the tax cuts for the wealthy embedded in the One Big Beautiful Bill will drive up the budget deficit and make the trade deficit even worse. In addition, the bizarre way policy is developed brings its own costs in the form of higher volatility and uncertainty, depressing investment. Apart from that, as they say, Trump’s policy has a lot going for it.

Yet so far, it is not clear that Trump is paying a political or much of an economic price for his actions. Opinion polls remain largely unmoved, and the MAGA coalition in Congress is holding. Unemployment remains low, the stock market is riding high and inflation can hardly be said to be out of control. The falling value of the dollar is a concern, but for a continental economy the consequences are not severe. The market for Treasury bonds wobbled for a while, but there remains no realistic alternative in the near term to investing in dollar assets.

Most other countries have chosen jaw-jaw, followed by kow-tow (literally in Keir Starmer’s case), rather than war-war with Trump. And global companies have fallen over themselves to announce the reshoring of manufacturing. TSMC, the world leader in semiconductor production, Apple, Toyota, Honda, Hyundai and even plucky Rolls-Royce have committed to new investment projects in the United States.

So, in the short term, the bully-boy tactics seem to be paying off. The world’s political and business leaders are beating a path to Trump’s door, flattering him as they go. Our very own Excellency in Washington continues to talk of a special relationship, praises Trump’s ‘sense of history’ and sees ‘a kernel of truth in everything he says’.

That kernel is well hidden from Coggan and the legion of economists he cites in this short, rapidly produced but still insightful book. I prefer Coggan’s conclusion that Trump ‘is smashing a system he does not understand and does not know how to replace it’ to Peter Mandelson’s ‘kernel of truth’ argument. But, of course, Coggan, unlike Mandelson, has not – as Sir Henry Wotton famously put it – ‘been sent to lie abroad for the good of his country’.