The U.S. economy has been sending mixed messages this year. Among the bright spots — including better-than-expected GDP growth and record stock market highs — there have also been areas of concern, such as weak jobs reports and rising inflation.
Meanwhile, President Donald Trump’s tariffs have created uneasiness over their potential impact on everything from consumer prices and GDP growth to the labor market.
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GOBankingRates asked ChatGPT how the Trump tariffs could affect the economy. Here’s what it said.
Slower Economic Growth and GDP Growth Decline
ChatGPT cited a report from Yale University’s Budget Lab estimating that tariffs could lead to a GDP growth decline of about 0.9 percentage points in 2025, with “lingering long-term effects” that could reduce annual real GDP by roughly 0.6%.
ChatGPT also cited a Penn Wharton Budget Model that projected a “long-run GDP drop” of about 6%, along with wage reductions of roughly 5%.
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Higher Consumer Prices and Inflation
ChatGPT referenced a recent Congressional Budget Office report, cited by Reuters, projecting that tariffs will raise inflation by about 0.4 percentage points in both 2025 and 2026, which in turn would reduce household and business purchasing power.
Tariffs “function like taxes,” according to ChatGPT, leading to higher business costs that are typically passed on to consumers
Job Losses and Labor Market Weakness
Recent data underscores a “sustained slowdown in job creation,” according to ChatGPT. It noted that in August 2025, the U.S. added a “mere” 22,000 jobs, while manufacturing jobs declined by 12,000 — part of an “ongoing trend of job losses” in sectors like manufacturing, mining and construction. Unemployment also rose to 4.3%, which was the highest since 2021.
“These trends — higher costs, weakened demand — are undermining Trump’s goal of reviving blue-collar employment,” ChatGPT noted.
Financial Market Volatility
The stock markets “reacted sharply” when broad tariffs were announced back in April 2025, with both the S&P 500 and Nasdaq seeing steep declines. However, ChatGPT did not mention that the markets later rallied to all-time highs.
Revenue Gains vs. Economic Cost
The tariffs are delivering “big federal revenues,” according to ChatGPT. But on the downside, certain economic models caution that losses in GDP and wages “far outweigh these gains.”
In conclusion, ChatGPT said that Trump’s tariffs are “currently weighing” on the U.S. economy, impacting growth, inflation, employment and financial markets in multiple ways.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: I Asked ChatGPT How the Trump Tariffs Will Affect the Economy: Here’s What It Said
