The administration of U.S. President Donald Trump may be engaged in what experts are calling a large and uncertain economic experiment, according to a report by The New York Times.

While the president’s trade approach may currently appear to be a political win, analysts and economists have raised serious concerns about whether it will translate into economic success.

Washington has imposed the highest tariffs since the early 20th century, a measure typically used by developing nations to protect domestic industries rather than by major industrial powers such as the United States, The New York Times notes.

An Unlikely Formula

Clyde Prestowitz, a former official and founder of the Economic Strategy Institute, stated that the current situation in the U.S. resembles the pre-1946 era, when governments adopted mercantilist policies and used protectionism as a tool to accumulate wealth.

He noted that such a strategy once yielded positive results for countries like the United Kingdom, the United States, France, Germany, and Japan, which were able to build their wealth during that time.

“But many economists warn that tariffs will ultimately slow economic growth and, in part, hinder efforts to boost manufacturing,” he added.

A Perceived Shift

Economist Brad Setser argued that most Americans will perceive a significant shift in trade policy, given the high tariffs that could potentially drag on economic performance.

He explained that tariffs at such levels are likely to raise prices for both importing companies and American consumers who purchase those products.

The Tariffs in Question

On April 2, Trump announced tariffs of more than 10 percent on products from 185 countries and territories. Although he later suspended those measures for 90 days on April 9, the administration entered a trade war until a deal was reached with Beijing in July.

Despite that agreement, major U.S. companies have reported substantial losses. Automotive giant General Motors recorded losses of $1.1 billion in the second quarter and projected an annual impact of between $4 billion and $5 billion, according to Reuters.

Tesla, which manufactures vehicles in the United States, also reported significant costs of around $300 million in one quarter due to reliance on imported components, Business Insider reported.

Technology firms in the San Francisco Bay Area, including Apple, Nvidia, and Meta, experienced a combined market capitalization drop of more than $1.1 trillion. Apple, Nvidia, and Meta alone accounted for approximately $653 billion in losses over just two days, according to the same source.