In brief
President Trump’s second term sees a 2.2 % GDP expansion, but inflation has climbed to 3.7 % as tariffs and the Iran war spike energy prices. AI data‑center spending has ballooned, boosting growth but raising carbon demand. Tax cuts and a rising deficit lift borrowing costs, pushing mortgage rates above 5 %. While median household income hit a record $87,460, many middle‑income families are still hurting from tariffs, subsidies loss and higher energy costs. The article examines whether these economic shifts help or hinder climate progress in the United States.
President Donald Trump’s return to power has sparked a flurry of economic claims. While the U.S. economy is expanding at an annualised rate of 2.2 % – the most growth among G7 members since the end of 2024 – the quiet forces behind that growth carry significant climate implications.
Growth vs. Green‑Tech Trade Barriers
Trump’s sweeping “Liberation Day” tariffs, introduced on 2 April 2025, were designed to protect domestic manufacturing. Yet they also limit the import of clean‑energy components and renewable technologies, slowing the rollout of greener infrastructure. Analysts noted that the tariff‑induced injury to investment and consumer spending was partially offset by easing the duties over subsequent months, but the initial spike in prices had already lifted the U.S. inflation rate to 3.7 % from the 3 % baseline inherited in January 2025.
AI Investment and Energy Demand
American tech firms are pouring petabytes of capital into data‑center construction – a $5 billion monthly outlay as of August 2026 – the highest ever recorded. Every new server intensifies electricity demand, increasing the national grid’s supply‑side carbon intensity. While AI drives productivity, it also escalates greenhouse‑gas emissions unless powered by renewables; the current energy mix remains heavily fossil‑fuel reliant.
Household Income and Climate Costs
Median household income adjusted for inflation rose 2.6 % in 2025 to $87,460 – the highest on record. However, the Institute on Taxation and Economic Policy estimated that middle‑income households are $1,700 worse off in 2026, partly due to the loss of health‑insurance subsidies and higher energy prices. Poorer families feel the pinch most acutely, with a $750 decline on average. Chemical fuel costs – exemplified by diesel reaching $6.52 a gallon in September – ripple through agriculture and retail, raising prices for staples such as beef and coffee.
Job Creation and Workforce Dynamics
Trump’s narrative of “flooding” the economy with new jobs has not materialised. On average, only 34,000 jobs are added per month since the administration began, compared with 122,000 during the last year of the Biden era. Manufacturing employment settled at 12.6 million in September 2026 — slightly below 2025 levels. A tighter workforce, driven by an Immigration crackdown, keeps unemployment low at 4.2 % but also concentrates employment opportunities in high‑pollution sectors.
Borrowing Costs and Climate‑Friendly Resilience
The federal deficit swelled to $2 trillion in the year to September 2026, a 6 % share of GDP. IMF forecasts warn that deficits above 8 % of GDP by 2030 raise the risk of a financial crisis, jeopardising the capital available for climate adaptation. Higher borrowing costs now push the 10‑year Treasury yield beyond 5 % for the first time since 2007, translating into a 30‑year mortgage rate of 7.4 %.
Tighter credit and higher housing costs curb the affordability of new homes, intensifying the need for energy‑efficient construction and community‑based resilience measures.
Data graphics by Erwan Rivault.
