One year since Trump's return to the White House: The US's two-track economy • FRANCE 24 English

US Economy Under Trump: A Year-One Assessment

Key Concepts: K-shaped economy, Inflation, Tariffs, S&P 500, Household Net Worth, Affordability Initiatives, Trade Wars, Diversification.

Economic Growth & Market Performance

The US economy has demonstrated robust growth under the current administration, with an annual growth rate of 4.3% in the third quarter of 2025, following a 3.8% growth in the previous quarter. The stock market has also experienced significant gains; the S&P 500 index, representing the top 500 US companies, has increased in value by nearly 15% since January, largely fueled by the artificial intelligence boom. Despite a temporary dip following the announcement of “Liberation Day” tariffs in April, the market has rebounded. President Trump expressed optimism, stating, “Right now I'm feeling pretty good… Under our administration, growth is exploding, productivity is soaring, investment is booming, incomes are rising, inflation is defeated, America is respected again like never before.”

The K-Shaped Economy & Wealth Inequality

However, this positive economic picture is not universally shared. Economists describe the US economy as “K-shaped,” characterized by diverging economic trajectories. The upper echelons of American society – the wealthiest individuals – are benefiting from rising stock and real estate values. Conversely, lower and middle-income Americans are struggling with persistent inflation, currently at 2.7%, and food inflation at 3.1%, with wages barely keeping pace. A stark statistic reveals that the bottom 50% of US households collectively own only 2.5% of the nation’s wealth, while 93% of US stocks are held by the top 10% of households. This disparity means that increases in home prices and share values have limited impact on a significant portion of the population, while rising food prices disproportionately affect them.

Public Perception & Political Response

Public sentiment does not align with the President’s optimistic assessment. A recent CNN survey indicated that 55% of Americans believe economic conditions have worsened under the Republican president. This negative perception is likely to influence the upcoming midterm elections. In response, President Trump has announced a series of “affordability initiatives,” including exempting dozens of agricultural products from reciprocal tariffs in November. The sincerity of these initiatives – whether they are genuine attempts to improve economic accessibility or merely electoral tactics – remains uncertain.

Impact of Tariffs & Global Trade Shifts

Trump’s tariff policies are significantly impacting the global trading system, creating friction in international exchanges. These policies are forcing businesses to adapt and diversify their markets. A case study focusing on German wine makers illustrates this shift. Previously targeting the US market, these producers are now increasingly focusing on China due to the trade war initiated by the tariffs.

German Wine Industry: A Case Study

German wine exports to the US decreased by 10% last year, while exports to China rose by 10%, and specifically Moselle white wines saw a 35% increase in exports to China. Kian Smith, a German wine producer, strategically shifted focus to the Chinese market in 2019, now selling approximately one in ten bottles to Chinese consumers. He actively participates in wine fairs in Shanghai. The industry generates 90 million euros in annual revenue and employs 5,000 wine makers. While China cannot fully compensate for losses in the US market, diversification into multiple Asian markets, including India, offers a positive outlook. Despite a general decline in wine consumption in China, German wines are experiencing increased sales. As Eric Riffle of the German Wine Institute stated, “We don't depend on a single country. We go wherever reasoning is appreciated.”

Logical Connections & Synthesis

The report establishes a clear contrast between macroeconomic indicators (growth, stock market performance) and the lived economic experiences of many Americans. The K-shaped economy framework highlights the widening wealth gap and explains the disconnect between official statistics and public perception. The German wine industry example demonstrates the tangible consequences of Trump’s tariff policies, illustrating how businesses are forced to adapt to a changing global trade landscape. The report concludes that while the US economy shows positive growth on paper, significant inequalities persist, and the impact of policies like tariffs extends beyond US borders, reshaping global trade patterns.