The 2025-12-22 Tariff Victory Lap: Big Claims—3.8% Growth, 2.7% Core Inflation—Sparse Evidence

On 2025-12-22, the administration declared 2025 “the year of the tariff,” crediting a new tariff architecture and a flurry of deals for re-industrialization, a shrinking trade deficit, and healthier real wages. The op-ed cites Q2 growth of 3.8%, a 2.7% core inflation rate allegedly “the lowest in five years,” and a “~25%” year-over-year drop in the goods deficit with China since August. The problem: the release offers sweeping claims with minimal data, mixes policy actions with macro outcomes, and provides no baselines, country lists, or time-series evidence to verify causality or even magnitude.

Here’s what the release says—and what it doesn’t:

• A “balanced trade” tariff regime—10% on surplus countries, 15% on small-deficit countries, higher on large-deficit countries—without listing countries, thresholds, or coverage by share of trade.

• A “since August” improvement in the global goods deficit and a ~25% YoY drop in the China goods gap—without absolute levels, definitions (Census vs BEA, SA vs NSA), or sources.

• Manufacturing is “coming back,” evidenced by anecdotes (rare earth magnets in South Carolina, shipyard orders, foundries/forges/pharma facilities)—but no sector-wide data on output, jobs, capacity, or capital formation.

• Macro wins—3.8% growth, 2.7% core inflation, “real wages up”—presented alongside tariff policy with implied attribution, yet no analytical linkage, counterfactuals, or controls.

• A long list of partner “frameworks” (EU in July; Southeast Asia and Japan in autumn; later Guatemala, El Salvador, Argentina, Ecuador) promising market access and NTB streamlining—absent partner-specific timelines, tariff-line schedules, or verification mechanisms.

Tariff Architecture Without a Map

A tiered tariff grid sounds systematic. In practice, the release offers an equation without variables. “Surplus countries” get 10%, “small deficit” countries 15%, and “large deficit” countries something higher. But who’s in which bucket? What are the thresholds? What share of U.S. goods imports fall into each tier? When do the rates take effect and on which tariff lines?

Without country lists, thresholds, and trade-weighted coverage, investors cannot model pass-through, margin impact, or supply chain pivots. If 70% of imports are effectively untouched, the macro narrative changes. If critical intermediate goods are in the higher tier, cost-push pressures rise. The release leaves that materiality unknowable.

This opacity extends to the diplomatic track. The text reprises familiar themes—NTB streamlining, digital trade and IP protection, labor provisions, security coordination—but remains programmatic rather than measurable. The 2025-10-26 and 2025-10-28 materials read similarly: heavy on commitments, light on numbers. The 2025-12-22 upgrade is a tone shift from promotion to proof—without the proof.

Deficit Wins Without Denominators

The headline-line claim—global goods deficit down “since August,” and the China goods deficit down ~25% YoY—invites basic follow-up: From what base? On which series? Seasonally adjusted or not? For which month? None of that is provided. Direction is not data.

To clarify what’s missing, line up the claims against what’s stated:

In other words, the release asks markets to price a victory without denominators. If the China deficit narrowed off a transitory import compression or front-loading reversal, the story is very different from a structural reorientation of supply chains. If the global deficit improvement is NSA and reflects seasonal troughs, the signal fades on revision.

Manufacturing by Anecdote, Not a Trend

Reindustrialization is not a single shipyard order or a magnet plant ribbon-cutting. It’s a time series. If manufacturing is “coming back,” we should see broad-based moves in:

• Output: Manufacturing production indices and capacity utilization.

• Jobs: Durable-goods employment, hours worked, and overtime.

• Investment: Real private nonresidential structures (manufacturing), equipment, and intellectual property products.

• Orders/exports: Factory orders, core capital goods, and goods exports by industry.

The release cites shipyard orders, foundries, forges, pharma, auto lines—great color, zero coverage. Without sector aggregates and trend persistence, anecdotes risk selection bias. Investors learned this the hard way in prior “reshoring” cycles: project announcements outpaced commissioning, and commissioning outpaced sustained throughput.

Macro Metrics, Missing Links

Two numbers headline the macro case: 3.8% Q2 growth and 2.7% core inflation. Both can be true, and tariffs may still have little to do with either.

• Growth at 3.8%: Which measure? Real GDP SAAR? Real GDI? Final sales? If it’s GDP SAAR, was the driver consumption, inventories, net exports, or government? Tariffs don’t instantly rewrite net exports; they often shift composition and pricing before quantities.

• Core inflation 2.7%: Which core—CPI ex food/energy, PCE core, trimmed mean? A five-year-low superlative without a series is marketing, not measurement. Linking it to tariff design flips conventional economics on its head unless pass-through is somehow cost-negative.

“Real wages are up” needs a yardstick. Average hourly earnings deflated by CPI tell one story; the Employment Cost Index or median weekly earnings tells another; distributional breadth across quartiles, another still. None are provided.

The larger issue: attribution. The release juxtaposes policy steps (tariffs and deals) with macro outcomes, implying causality without even a rudimentary framework—no lags, no controls, no counterfactual. That’s not analysis; it’s choreography.

What This Means for Markets

Until the numbers show up, treat the tariff narrative as an options-style exposure with asymmetric outcomes.

• Equities:

• Rates and inflation:

• FX and trade-sensitive EM:

• Commodities and logistics:

What to Watch (Data, Not Declarations)

• Trade balance detail: U.S. Census monthly goods trade with China, SA vs NSA, and by end-use/HS category. Verify the ~25% YoY claim with levels and composition.

• Tariff coverage: Official country lists, thresholds, effective dates, and tariff lines for the 10%/15%/higher tiers. Estimate the share of imports impacted.

• Manufacturing breadth: Fed industrial production (manufacturing) and capacity utilization; BEA real manufacturing structures investment; durable-goods orders (core capital goods).

• Wage series: ECI, AHE, median weekly earnings—deflated consistently—and dispersion across quartiles.

• Inflation definitions: Clarify which “core 2.7%” series the release references (CPI vs PCE). Track goods vs services split for tariff pass-through.

The Investor Takeaway

This is a confidence-forward story with a data-backward backbone. The 2025-12-22 release plants a flag—“tariffs plus deals are working”—but withholds the map. For now:

• Fade the victory lap. Require denominators (levels, baselines, SA/NSA) before pricing structural shifts in trade or inflation.

• Position for verification. Own quality industrials with contracted backlogs and diversified sourcing; underweight narrative-only reshoring plays until factory output and investment prints corroborate.

• Hedge inflation ambiguity. A selective allocation to breakevens or TIPS remains sensible while tariff coverage and pass-through are undefined.

• Demand transparency. Country lists, thresholds, trade shares, and time-series links are not nice-to-haves; they are the difference between a policy brochure and an investment thesis.

The story could become real—but markets don’t pay for aspiration. They pay for cash flows, cost curves, and data you can audit. Until the administration provides that, let the numbers—not the narrative—set your risk budget.