Finance
Trump’s shakeup of global trade creates uncertainties for 2026
The Blueprint
- 2025 tariffs lifted U.S. import taxes to nearly 17%, generating $30B/month.
- Framework deals struck with EU, UK, Japan, South Korea, Vietnam; China deal remains unresolved.
- U.S. economy rebounded despite early contraction; AI investments and consumer spending helped growth.
- Key 2026 developments include Supreme Court rulings, U.S.-China talks, and NAFTA review.
President Donald Trump’s return to the White House in 2025 kicked off a frenetic year for global trade, with waves of tariffs on U.S. trading partners that lifted import taxes to their highest since the Great Depression, roiled financial markets and sparked rounds of negotiations over trade and investment deals.
His trade policies — and the global reaction to them — will remain front and center in 2026, but face some hefty challenges.
What happened in 2025
Trump’s moves, aimed broadly at reviving a declining manufacturing base, lifted the average tariff rate to nearly 17% from less than 3% at the end of 2024, according to Yale Budget Lab, and the levies are now generating roughly $30 billion a month of revenue for the U.S. Treasury.
They brought world leaders scrambling to Washington seeking deals for lower rates, often in return for pledges of billions of dollars in U.S. investments. Framework deals were struck with a host of major trading partners, including the European Union, the United Kingdom, Switzerland, Japan, South Korea, Vietnam and others, but notably a final agreement with China remains on the undone list despite multiple rounds of talks and a face-to-face meeting between Trump and Chinese leader Xi Jinping.
The EU was criticized by many for its deal for a 15% tariff on its exports and a vague commitment to big U.S. investments. France’s prime minister at the time, Francois Bayrou, called it an act of submission and a “sombre day” for the bloc. Others shrugged that it was the “least bad” deal on offer.
Since then, European exporters and economies have broadly coped with the new tariff rate, thanks to various exemptions and their ability to find markets elsewhere. French bank Societe Generale estimated the total direct impact of the tariffs was equivalent to just 0.37% of the region’s GDP.
Meanwhile, China’s trade surplus defied Trump’s tariffs to surpass $1 trillion as it succeeded in diversifying away from the U.S., moved its manufacturing sector up the value chain, and used the leverage it has gained in rare earth minerals — crucial inputs into the West’s security scaffolding — to push back against pressure from the U.S. or Europe to curb its surplus.
What notably did not happen was the economic calamity and high inflation that legions of economists predicted would unfold from Trump’s tariffs.
The U.S. economy suffered a modest contraction in the first quarter amid a scramble to import goods before tariffs took effect, but quickly rebounded and continues to grow at an above-trend pace thanks to a massive artificial intelligence investment boom and resilient consumer spending. The International Monetary Fund, in fact, twice lifted its global growth outlook in the months following Trump’s “Liberation Day” tariffs announcement in April as uncertainty ebbed and deals were struck to reduce the originally announced rates.
And while U.S. inflation remains somewhat elevated in part because of tariffs, economists and policymakers now expect the effects to be more mild and short-lived than feared, with cost sharing of the import taxes occurring across the supply chain among producers, importers, retailers and consumers.
What to look for in 2026 and why it matters
A big unknown for 2026 is whether many of Trump’s tariffs are allowed to stand. A challenge to the novel legal premise for what he branded as “reciprocal” tariffs on goods from individual countries and for levies imposed on China, Canada and Mexico tied to the flow of fentanyl into the U.S. was argued before the U.S. Supreme Court in late 2025, and a decision is expected in early 2026.
The Trump administration insists it can shift to other, more-established legal authorities to keep tariffs in place should it lose. But those are more cumbersome and often limited in scope, so a loss at the high court for the administration might prompt renegotiations of the deals struck so far or usher in a new era of uncertainty about where the tariffs will end up.
Arguably just as important for Europe is what is happening with its trading relationship with China, for years a reliable destination for its exporters. The depreciation of the yuan and the gradual move up the value chain for Chinese companies have helped China’s exporters. Europe’s companies meanwhile have struggled to make further inroads into the slowing domestic Chinese market. One of the key questions for 2026 is whether Europe finally uses tariffs or other measures to address what some of its officials are starting to call the “imbalances” in the China-EU trading ties.
Efforts to finally cement a U.S.-China deal loom large as well. A shaky detente reached in this year’s talks will expire in the second half of 2026, and Trump and Xi are tentatively set to meet twice over the course of the year.
And lastly, the free trade deal with the two largest U.S. trading partners — Canada and Mexico — is up for review in 2026 amid uncertainty over whether Trump will let the pact expire or try to retool it more to his liking.
What analysts are saying:
“It seems like the administration is rowing back on its harshest stance on tariffs in order to mitigate some of the inflation/pricing issues,” Chris Iggo, chief investment officer for Core Investments and chair of the Investment Institute at AXA Investment Managers, said on a 2026 outlook call. “So less of a concern to markets. Could be marginally helpful to the inflation outlook if tariffs are reduced or at least not further increased.”
Ahead of midterm elections later in the year, “a confrontational trade war with China would not be great — a deal would be politically and economically better for the U.S. outlook,” he said.
Written by Jitendra Parashar at The Motley Fool Canada
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Finance
Martha Aguirre, former El Paso ISD interim superintendent, resigns as CFO as district finds ‘key financial challenges’
El Paso Independent School District Chief Financial Officer Martha Aguirre, who served as interim superintendent last year, resigned this week as the district said it had discovered “key financial challenges.”
The district issued a news release late Thursday afternoon that lacked details but indicated that a recent review had raised questions about the district’s fund balances, a key indicator of financial health.
“Through this process, key financial challenges were identified that must be addressed prior to closing out the 2025-26 school year including a current budget shortfall that is being actively addressed ahead of the district’s final financial presentation to the Board of Trustees in June,” the news release said.
A CFO is charged with developing a school district’s budget and overseeing its finance department. The EPISD Board of Trustees must adopt a budget for the 2026-27 school year by the end of the fiscal year June 30. The operating budget for the current school year is $547 million.
EPISD Deputy Superintendent David Bates will oversee the budget while the district searches for an interim and permanent CFO, district officials said in a statement.
EPISD Board President Leah Hanany said trustees were notified about Aguirre’s resignation this week. She said the district plans to give the public more information on the current year’s budget during a board meeting later this month.
“The board was also notified of a potential budget shortfall for the 2025 budget, but we don’t have final numbers yet. My understanding is that we are still primed to pass a balanced budget for fiscal year 2026-27 in June,” Hanany said in a statement.
Aguirre could not be reached for comment. EPISD’s CFO makes $148,200 to $209,900 a year, according to the district’s administrative pay plan.
She served as EPISD’s interim superintendent from June to December 2025 after the district’s former superintendent, Diana Sayavedra, resigned under pressure from the board. She returned to her position as CFO when Brian Lusk was hired as EPISD’s new permanent superintendent.
Aguirre’s resignation comes amid an uncertain budget season after a state funding calculation error tied to school property tax breaks caused EPISD to lose out on $17 million in projected revenue. In late April, EPISD officials estimated it would cause the district’s spending to exceed its revenue next year by $10 million.
The district is also considering calling for a bond election in November to upgrade its aging campuses as part of the larger 2024 Destination District Redesign initiative to close schools and improve the ones that remain open.
El Paso Teachers’ Association President Norma De La Rosa said Aguirre’s departure was unexpected.
“We’re right in the middle of the committee meetings for a possible bond and getting ready to get that budget to the June board meeting for next school year. So, to say that I’m highly surprised is an understatement,” De La Rosa told El Paso Matters.
Aguirre started working with the district in 1996 as a general clerk, according to a video published by the district.
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