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President Donald Trump’s sweeping tariffs have been deemed illegal by the U.S. supreme court, but that doesn’t mean he’s changing his view on the policy tool \u2014 far from it.<\/p>\n
“The TRADE DEFICIT was down 55%, the biggest drop in history,” Trump declared in a recent post on Truth Social (1). “THANK YOU MR. TARIFF!”<\/p>\n
According to the latest U.S. International Trade in Goods and Services report from the Bureau of Economic Analysis, the goods and services deficit for January and February 2026 fell by $136.1 billion, or 54.8%, compared to the same period in 2025 (2).<\/p>\n
A trade deficit occurs when a country imports more than it exports \u2014 and the U.S. has carried a massive trade deficit for decades.<\/p>\n
The sharp narrowing in the first two months of the year was driven by a $62.6 billion (11.3%) year-over-year increase in exports, alongside a $73.5 billion (9.2%) decline in imports.<\/p>\n
Tariffs are designed to discourage imports and reshape trade flows, so the trend isn’t entirely unexpected.<\/p>\n
But the comparison comes with important context.<\/p>\n
The baseline period \u2014 early 2025 \u2014 coincided with a surge in imports, as firms rushed to bring in goods ahead of anticipated tariff announcements, potentially making the year-over-year drop appear more dramatic.<\/p>\n
And on a sequential basis, the trend looks less clear-cut.<\/p>\n
In February, the goods and services deficit widened by 4.9% from January to $57.3 billion. Exports rose 4.2% month over month to $314.8 billion, but imports increased slightly more \u2014 up 4.3% to $372.1 billion.<\/p>\n
Economists generally view tariffs as a double-edged sword.<\/p>\n
On one hand, they can protect domestic industries by making imported goods more expensive, giving local manufacturers a competitive edge. On the other hand, higher tariffs may result in increased costs for consumers, as companies pass on the extra expenses. This can lead to inflation, eroding household purchasing power and raising the cost of living.<\/p>\n
There are also concerns that tariffs could draw retaliation from trading partners. But after October 2025 data showed America’s trade deficit falling to its lowest level since 2009, some economists struck a more upbeat tone (3).<\/p>\n
“The U.S. appears to be winning the trade war with tariffs curbing the imports of foreign goods, but America’s trading partners are not holding any grudge as they continue to buy more American goods and services,” said Chris Rupkey, chief economist at Fwdbonds.<\/p>\n
Tariffs can also generate significant revenue for the federal government. According to the Brookings Institution, tariff revenue surged to $264 billion in 2025 \u2014 more than triple the amount in 2024 (4).<\/p>\n
Trump has repeatedly floated the idea of returning some of that money to Americans in the form of a “tariff dividend,” though the concept has yet to materialize.<\/p>\n
And policy is still evolving. After scaling back sweeping tariffs to a 10% blanket rate \u2014 and later suggesting it could rise to 15% \u2014 the longer-term fiscal and economic impact remains uncertain.<\/p>\n
Meanwhile, the question of who actually pays for tariffs may have a sobering answer.<\/p>\n
Research from the Federal Reserve Bank of New York finds that nearly 90% of tariff costs are borne by U.S. firms and consumers, rather than foreign producers (5).<\/p>\n
Data from the Yale Budget Lab points in a similar direction. Prices for imported consumer goods and durable goods rose about 1.5% in 2025 through January, both well above prior-year comparisons. Estimates suggest tariff pass-through to consumer prices ranges from roughly 46% to 86% for core goods and 51% to 115% for durables (6).<\/p>\n
That pressure comes as geopolitical conflicts are also pushing energy prices higher, with $4 gas making headlines.<\/p>\n
The good news? Throughout history, savvy investors have often found ways to shield themselves from inflation’s bite \u2014 even when policy out of Washington falls short.<\/p>\n
When it comes to preserving wealth and fighting inflation, few assets have stood the test of time like gold.<\/p>\n
Its appeal is simple: unlike fiat currencies, the yellow metal can’t be printed at will by central banks.<\/p>\n
Gold is also considered the ultimate safe haven. It’s not tied to any one country, currency or economy, and in times of economic turmoil or geopolitical uncertainty, investors often flock to it \u2014 driving prices higher.<\/p>\n
Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, told<\/a> CNBC last year that “People don’t have, typically, an adequate amount of gold in their portfolio,” adding, “When bad times come, gold is a very effective diversifier.”<\/p>\n Despite a recent pullback, gold prices have surged by more than 45% over the last 12 months.<\/p>\n Other prominent voices see further potential. JPMorgan CEO Jamie Dimon recently said<\/a> that in this environment, gold can “easily” rise to $10,000 an ounce.<\/p>\n One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold<\/a>.<\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold<\/a>, making it an option for those looking to help shield their retirement funds against economic uncertainties.<\/p>\n When you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in precious metals<\/a> for free.<\/p>\n Gold isn’t the only asset investors turn to during inflationary times. Real estate has also proven to be a powerful hedge.<\/p>\n When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.<\/p>\n Over the past ten years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped by 87% (7), reflecting strong demand and limited housing supply.<\/p>\n Of course, high home prices can make buying a home more challenging, especially with mortgage rates still elevated. And being a landlord isn’t exactly hands-off work \u2014 managing tenants, maintenance and repairs can quickly eat into your time (and returns).<\/p>\n The good news? You don’t need to buy a property outright \u2014 or deal with leaky faucets \u2014 to invest in real estate today. Crowdfunding platforms like mogul<\/a> offer an easier way to get exposure to this income-generating asset class.<\/p>\n mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties<\/a>, which gives investors monthly rental income, real-time appreciation and tax benefits \u2014 without the need for a hefty down payment or 3 A.M. tenant calls.<\/p>\n Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide<\/a> for you. In other words, you gain access to institutional-quality offerings for a fraction of the usual cost.<\/p>\n Each property undergoes a rigorous vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Offerings often sell out in under three hours<\/a>, with investments typically ranging between $15,000 and $40,000 per property.<\/p>\n You can sign up for an account and then browse available properties here<\/a>.<\/p>\n Another option is Lightstone DIRECT<\/a>, which offers accredited investors access to institutional-quality multifamily and industrial real estate \u2014 with a minimum investment of $100,000.<\/p>\n Founded in 1986 by David Lichtenstein, Lightstone Group is one of the largest privately held real estate investment firms in the U.S., with more than $12 billion in assets under management.<\/p>\n Over nearly four decades, their team has delivered strong, risk-adjusted performance across multiple market cycles \u2014 including a 27.6% historical net IRR and a 2.54x historical net equity multiple on realized investments since 2004.<\/p>\n With Lightstone DIRECT, you gain access to the same multifamily and industrial deals Lightstone pursues with its own capital<\/a>.<\/p>\n Here’s the kicker: Lightstone invests at least 20% of its own capital in every deal<\/a> \u2014 roughly four times the industry average. With skin in the game, the firm ensures its interests are directly aligned with those of its investors.<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>.<\/p>\n Truth Social (1)<\/a>; U.S. Bureau of Economic Analysis (2)<\/a>; CNBC (3)<\/a>; Brookings Institution (4)<\/a>; Federal Reserve Bank of New York (5)<\/a>; Yale Budget Lab (6)<\/a>; S&P Global (7)<\/a><\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. 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