Trump's "Liberation Day" tariffs will cost US households an estimated $2,100 per year
The average American household will pay $2,100 more per year for goods because of the slew of new tariffs President Donald Trump announced Wednesday, the nonpartisan Tax Foundation said.
Trump’s plan will lead to a significant, $900 billion decline in America’s imports, the Tax Foundation says. That decline will come as consumers shift to American goods — or simply choose not to buy certain items that will become too expensive.
Nevertheless, Americans won’t be able to avoid paying more as a result of tariffs. America’s average import tax will surge to 19% this year from 2.5% last year — the highest rate since the Smoot-Hawley era in 1933. Fitch Ratings said the rate would rise even higher, sending America’s effective tariff rate to its highest level in more than a century.
As a result, Americans’ after-tax incomes will decline 2.1% on average this year, the Tax Foundation said. Although no one will escape the tariffs, wealthier Americans’ incomes will decline less, the group found.
Mainstream economists largely agree the US and global economies will plunge into a recession this year if Trump doesn’t loosen up his new trade policy. The Trump administration has been pushing back on those predictions, arguing Trump’s trade actions in his first term were widely predicted to cause inflation to soar and the economy to slow — neither of which happened.
However, Trump in his entire first term put in place tariffs on $380 billion worth of goods. Already, Trump has announced tariffs on more than $2.5 trillion of imports, and he has promised more tariffs are on their way.
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