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President Donald Trump’s sweeping tariffs have been ruled illegal by the U.S. Supreme Court, but that doesn’t mean he’s changing his approach to the policy tool — far from it.
“The trade deficit was down 55%, the largest drop in history,” Trump announced in a recent post on Truth Social (1). “Thank you Mr. Tariff!”
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 decreased by $136.1 billion, or 54.8%, compared to the same period in 2025 (2).
A trade deficit occurs when a country imports more than it exports—and the U.S. has run huge trade deficits for decades.
A sharp contraction in the first two months of the year led to a $62.6 billion (11.3%) year-on-year increase in exports, while a $73.5 billion (9.2%) decline in imports.
Tariffs are designed to discourage imports and reshape trade flows, so the trend is not entirely unexpected.
But the comparison comes with important context.
The baseline period – early 2025 – coincided with a surge in imports, as firms rushed to bring in goods ahead of anticipated tariff announcements, potentially making year-on-year declines look more dramatic.
And on a sequential basis, the trend seems less clear-cut.
The goods and services deficit in February rose 4.9 percent from January to $57.3 billion. Exports rose 4.2% to $314.8 billion in the month, but imports rose slightly — up 4.3% to $372.1 billion.
Economists generally view tariffs as a double-edged sword.
On the one hand, they can protect domestic industries by making imported goods more expensive, giving local producers a competitive edge. On the other hand, higher tariffs can result in increased costs for consumers, as companies pass on additional costs. This can lead to inflation, reduce household purchasing power and increase the cost of living.
There are also concerns that tariffs could lead to retaliation from trading partners. But data after October 2025 showed the US trade deficit falling to its lowest level since 2009, while some economists struck a more upbeat tone (3).
“The U.S. appears to be winning the trade war by banning imports of foreign goods, but America’s trading partners are holding no grudges as they continue to buy more U.S. goods and services,” said Chris Rupkey, chief economist at Fwdbonds.
Fees can also generate significant revenue for the federal government. According to the Brookings Institution, tariff revenues are projected to reach $264 billion in 2025—more than three times the amount in 2024 (4).
Trump has repeatedly floated the idea of returning some of that money to Americans as a “tariff dividend,” though the concept has yet to materialize.
And the policy is still evolving. After rolling back sweeping tariffs to a flat rate of 10% — and later suggesting it could rise to 15% — the long-term fiscal and economic impact remains uncertain.
In the meantime, the question of who actually pays for the tariffs may have a serious answer.
Research by the Federal Reserve Bank of New York found that about 90% of tax costs are borne by American firms and consumers rather than foreign producers (5).
Data from the Yale Budget Lab point in the same direction. Prices of imported consumer goods and durable goods rose about 1.5% in 2025 through January, both significantly higher than a year earlier. Estimates suggest tariff pass-through to consumer prices ranges from about 46% to 86% for basic goods and 51% to 115% for durable goods (6).
That pressure comes as geopolitical conflicts also push energy prices higher, making headlines for $4 gas.
Good news? Throughout history, savvy investors have often found ways to protect themselves from the bite of inflation—even when policy outside Washington is lax.
Read more: Taxes are changing under Trump’s ‘big beautiful bill’ – 4 reasons retirees can’t afford to waste time
When it comes to protecting wealth and fighting inflation, few assets have stood the test of time like gold.
Its appeal is simple: unlike fiat currencies, the yellow metal cannot be printed at will by central banks.
Gold is also considered the last safe haven. It is not tied to any one country, currency or economy, and in times of economic turmoil or geopolitical uncertainty, investors often flock to it – driving up prices.
Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, told CNBC last year, “People don’t have enough gold in their portfolios,” adding, “When times are bad, gold is a very effective diversification.”
Despite the recent pullback, gold prices have rallied more than 45% over the past 12 months.
Other prominent voices see more potential. JPMorgan CEO Jamie Dimon recently said gold could “easily” rise to $10,000 an ounce in this environment.
One way to invest in gold that also offers significant tax benefits is to open a gold IRA with preferred gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax benefits of an IRA with the protective benefits of investing in gold, making it an option for those looking to help protect their retirement funds against economic uncertainties.
When you make a qualifying purchase with Priority Gold, you can get up to $10,000 worth of precious metals for free.
Gold is not the only asset investors need during inflation. Real estate has also proven to be a powerful hedge.
When inflation rises, property prices often rise, reflecting higher costs of materials, labor and land. At the same time, rental income increases, providing landlords with a revenue stream that adjusts for inflation.
Over the past ten years, the S&P Cotality Case-Shiller US National Home Price NSA Index has increased by 87% (7), reflecting strong demand and limited housing supply.
Of course, higher home prices can make buying a home more challenging, especially with mortgage rates still higher. And being a landlord isn’t exactly hands-off work—renting, maintenance, and upkeep can eat up your time (and payback) quickly.
Good news? Investing in real estate today doesn’t require you to buy real estate — or deal with leaky faucets. Crowdfunding platforms like Mogul provide an easy way to gain exposure to this income-generating asset class.
Mogul is a real estate investment platform that offers fractional ownership in blue-chip rental properties, giving investors monthly rental income, real-time valuations and tax benefits — without the need for hefty down payments or 3 a.m. rental calls.
Founded by former Goldman Sachs real estate investors, the team handpicks the top 1% of single-family rental homes nationwide for you. In other words, you get access to institutional-quality offerings for a fraction of the normal cost.
Each asset goes through a rigorous vetting process, even in negative scenarios requiring a minimum 12% return. Across the board, the platform features an average annual IRR of 18.8%. Offers often sell within three hours, with investments typically between $15,000 and $40,000 per property.
You can sign up for an account and then browse the available properties here.
Another option is Lightstone DIRECT, which offers accredited investors access to institutional-quality multifamily and industrial real estate — with a minimum investment of $100,000.
Founded by David Lichtenstein in 1986, Lightstone Group is one of the largest privately held real estate investment firms in the US, with more than $12 billion in assets under management.
Over nearly four decades, their team has delivered strong, risk-adjusted performance over multiple market cycles — including a 27.6% historical net IRR and a 2.54x historical net equity multiple on actual investments since 2004.
With Lightstone DIRECT, you get access to the same multifamily and industrial deals that Lightstone pursues with its own capital.
Here’s the kicker: Lightstone invests at least 20% of its own capital in each deal — nearly four times the industry average. With skin in the game, the firm ensures that its interests are directly aligned with those of its investors.
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We rely only on vetted sources and reliable third-party reporting. For details, see our Ethics and guidelines.
True Social (1); US Bureau of Economic Analysis (2); CNBC (3); Brookings Institution (4); Federal Reserve Bank of New York (5); Yale Budget Lab (6); S&P Global (7)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
