The US tariff war launched by President Donald Trump in April 2025 has delivered limited results in reducing the country’s overall trade deficit, according to an analysis by economists Jayati Ghosh and C.P. Chandrasekhar.

The tariff strategy began with a 10% baseline duty on most US imports, followed by additional country-specific tariffs. The measures were aimed at reducing trade deficits and encouraging trading partners to make concessions on trade and investment.

US goods trade deficits with several major trading partners declined after the tariffs were introduced. However, the overall improvement has been less significant than initial figures suggest. A sharp rise in imports during the first quarter of 2025, ahead of the tariff increases, affected comparisons.

Taiwan and Vietnam recorded notable increases in their trade surpluses with the US between the first quarter of 2025 and the second quarter of 2026. Machinery, mechanical appliances, electrical equipment and semiconductor-related products were major contributors.

Vietnam has emerged as a significant export platform for foreign companies. US imports from Vietnam increased from $41.9 billion in the first quarter of 2025 to $66.5 billion in the second quarter of 2026. Traditional exports such as garments, footwear and furniture accounted for only a small share of this increase.

The analysis points to two major challenges for the US tariff strategy. The first is continued dependence on global semiconductor supply chains, particularly amid strong investment in artificial intelligence and data centres. The second is the continued role of offshore production in supplying US markets.

The findings suggest that tariffs have changed trade patterns across countries, but have not significantly reduced the structural factors behind the US trade deficit.