Trump outlines what ‘total victory’ looks like in his trade war. It'll cost you

President Donald Trump said he would declare “total victory” if tariffs reached 50% a year from now. Speaking to Time magazine, Trump suggested that high tariffs could become a permanent policy.

“I’d go to 50% and declare total victory,” he said during the Tuesday interview, released Friday.

The United States now imposes the highest effective tariff rate among developed countries—22.8%, according to Fitch Ratings. That’s largely due to historic tariffs Trump placed on a wide range of goods. These include 10% on most imports, 25% on steel, aluminum, and autos, and at least 145% on goods from China.

Trade volumes have dropped sharply as a result. In the Oval Office Wednesday, Trump said trade with China had slowed to “effectively zero.” China’s retaliatory tariffs added further pressure on American exporters.

Warehouses are running low on pre-tariff inventory. Soon, businesses must either pay higher import prices or stop selling affected products. The Federal Reserve’s latest Beige Book said companies are holding off on hiring and investment. The word “uncertainty” appeared 81 times in the report a record.

“Businesses are hesitant to invest,” the report noted, citing confusion over long-term trade policy.

Despite these signals, Trump defended his approach. “The country will be making a fortune,” he told Time. He argued that tariffs will force companies to move production back to the U.S., boosting jobs and investment.

However, economists challenge this theory. “Tariffs are a tax on U.S. consumers and businesses,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. “They don’t bring back manufacturing in the short run.”

There’s also the labor gap to consider. The U.S. has nearly 500,000 unfilled factory jobs, according to the Department of Labor. Even if companies return production to the U.S., they may struggle to find workers. Building new factories also takes years and tariffs have increased construction costs.

Trump claims the U.S. earns “billions a day” from tariffs. But Treasury data shows revenue in the hundreds of millions. And those funds come from U.S. importers, not foreign companies. Consumers ultimately bear those costs through higher prices.

“That’s why consumer sentiment has tanked,” said Diane Swonk, chief economist at KPMG. “People are tightening spending, and businesses are feeling the pinch.”

Markets responded quickly. Stocks dipped slightly Friday after Time published the interview. This follows broader volatility tied to trade uncertainty.

Still, Trump says relief is on the way. He claims to have made “200 deals” to support fairer trade and bring jobs home. “We’re meeting with China. We’re doing fine with everybody,” he said. “But ultimately, I’ve made all the deals.”

He promised to reveal these agreements within three to four weeks though on Wednesday he shifted that timeline to two or three weeks.

The deals would still include tariffs, adjusted to reflect military support, tax differences, and other economic factors. Trump likened the U.S. to “a giant department store,” saying, “They’re going to pay a price for taking our treasure.”

While Trump has hinted at easing tensions with China, he denied that the decision stemmed from market losses. “The bond market was getting the yips, but I wasn’t,” he said. “I know what we have.”

Federal Reserve Chair Jerome Powell, meanwhile, continues to signal caution. He said any rate changes would follow “careful consideration,” distancing monetary policy from trade-related pressures.

As the U.S. nears the end of its warehoused supply, the effects of these tariffs will soon hit home for many. Empty shelves, higher prices, and stalled job growth may become the new normal if current policies remain.