Corporate bankruptcies in the United States hit their highest level in 15 years in 2025, and economists say a major culprit is President Donald Trump’s sweeping trade policies.
Between January and November 2025, at least 717 companies filed for Chapter 7 or Chapter 11 bankruptcy, according to data from S&P reviewed by The Washington Post.
That marks a 14% jump compared to the same period in 2024, and the most filings seen since 2010, the tail end of the Great Recession.
“That’s a 14% increase from last year, and it is the highest level since 2010. There is one primary reason why, and it is the blanket tariffs put in place by a president who is the color of a traffic cone,” said David Pakman, host of The David Pakman Show.
Industries most affected include construction, manufacturing, and transportation, ironically, the very sectors Trump had promised to revive.
The manufacturing sector alone posted 70,000 job losses year-over-year in November. Consumer-focused companies, particularly those selling non-essential goods like fashion and furniture, were also hit hard as households pulled back spending.
“These companies are acutely aware of the affordability crisis confronting the average American,” said Jeffrey Sonnenfeld, a Yale University professor, in comments to The Post.
“They are doing their best to offset the cost of tariffs and higher interest rates but can only do so much. Those with pricing power will pass on the costs over time … others will fold.”
The Tariff Effect
Pakman summed it up sharply: “Corporate bankruptcies in the United States just hit a 15-year high, not during a recession or market crash, but right now.”
He pointed to the core reason as Trump’s “blanket tariffs,” which he said have “driven up costs across the economy. The imported materials cost more, the components cost more, and shipping costs more.”
Pakman also didn’t shy away from calling out the bigger issues at play.
He claimed Trump is “doing the same thing to the country” that he did to his failed businesses, “governs the way that he ran his companies, impulsively and vindictively and without understanding that there are second and third order effects to what you do.”
Case Studies: Spirit Airlines and PosiGen
Among the notable bankruptcies were Spirit Airlines and PosiGen, a solar energy company. Spirit filed for Chapter 11 in August, its second filing in less than 12 months.
Meanwhile, PosiGen blamed its November bankruptcy on solar tariffs and slashed federal tax incentives, which once made renewable energy installations more accessible.
Business professor Jason Miller of Michigan State University told The Post that the effective tariff rate on solar imports rose to 20 percent after May, up from below 5 percent.
“That places a lot of strain on cash flow, especially for smaller importers,” he said.
The White House Response
President Trump, however, has insisted the tariffs are working. On Truth Social, he claimed, “Tariffs are creating GREAT WEALTH, and unprecedented National Security for the USA. Trade deficit has been cut by 60%, totally unheard of. 4.3% GDP, and going way up. No inflation!!!”
But critics argue that those surface-level numbers mask a growing divide. “In the aggregate, the economy looks okay, but the gains are very unevenly shared,” Pakman said.
He noted that while some investors and AI-heavy sectors are thriving, many businesses are “just absorbing the pain.”
Economic Contradictions
The U.S. economy did post a 4.3% annual growth rate, the fastest in two years, but economists say that growth is largely fueled by high-income consumers and corporate investments, not a broad-based recovery.
Meanwhile, more companies are collapsing under rising costs, weakening demand, and tighter financial conditions.
Martin-Schoenberger, an economist at KPMG, described the situation as a contradiction.
“We have an economy that looks strong on paper, but that might not necessarily be reflected in every single industry,” he said.
Pakman added another dimension, saying the fallout from Trump’s trade policies “lines up with the interests of our adversaries.”
He argued that destabilizing alliances and supply chains, while weakening domestic businesses, benefits nations like Russia and China.
“You couldn’t design a better asset if you tried,” he said.
Looking Ahead
As bankruptcies continue to mount, the concern among economists isn’t just about current numbers but what they signal. For smaller companies, especially, the combination of tariffs, inflation, and reduced consumer spending has become unsustainable.
Pakman offered a stark final thought: “We end up with this bizarre situation. Some headline numbers look okay, 4.3% GDP, stock market is doing okay, but we’ve got record bankruptcies.”
He warned that behind the celebratory rhetoric, economic stress is spreading, and more businesses may not survive 2026.