TAG Industrial Watch: February 21, 2026

With the release of December’s international trade data, we now have our first comprehensive look at the impact of President Trump’s tariffs. Although the trade deficit in merchandise goods hit a record $1.23 trillion in 2025, many of the headlines dismissing the impact of the tariffs are misleading. Prior to the president’s Liberation Day announcement last April, U.S. companies frontloaded the tariffs in record fashion, sending imports soaring. However, the moment the tariffs went into full effect in August, a fundamental change occurred. From August to December, the trade deficit narrowed by $123.2 billion to -$423.2 billion compared to the same period a year earlier. Although imports dropped -4.4% annually during this time, largely due to the tariffs as planned, exports jumped by 7.0%, but not for the reason the Trump administration expected. As TAG predicted, instead of a resurgence in manufacturing that has yet to materialize, it was a surprisingly sustained fall in the dollar’s exchange value that allowed foreigners to outbid Americans for goods made in America. Although TAG expects the dollar to decline even more this year, this is good news for export-related companies and the landlords of their specialized industrial facilities.