President Donald Trump’s tariffs are costing American households hundreds of dollars a year, according to new research from the Tax Foundation.
In a report examining the “economic impact” of the administration’s trade policy, the nonprofit think tank—known for generally favoring lower taxes—estimated that tariffs amounted to an average tax increase of about $1,000 per U.S. household in 2025. If the current duties remain in place, that figure is projected to rise to $1,300 in 2026.
Critics argue that broad import tariffs create economic uncertainty, strain relationships with key trading partners, and ultimately push costs onto U.S. businesses and consumers rather than foreign governments or companies. The administration, meanwhile, says the policy is meant to protect and rebuild domestic industry, address trade imbalances, and generate revenue that could help reduce deficits or support other domestic priorities.
The Tax Foundation said Trump “imposed and threatened a variety of tariffs” during his first year back in office, with rates and coverage shifting repeatedly as negotiations progressed or proposals were scaled back. Even so, the group’s analysis concludes that the second-term tariffs represent the largest U.S. tax increase as a share of GDP since 1993, when President Bill Clinton signed the Omnibus Budget Reconciliation Act.
The report also compares today’s tariff levels with recent history. The World Bank lists the weighted-average applied tariff rate on U.S. imports at 1.5% in 2022. The Tax Foundation estimates that, with current and scheduled tariffs, the effective rate rises to 13.5%. If tariffs imposed through emergency powers—now under Supreme Court review—are excluded, the rate would be 6.4% in 2026, according to the analysis.
Over the next decade, the imposed tariffs are projected to raise more than $2 trillion in revenue while reducing U.S. GDP by 0.5%, the report said. After accounting for broader economic drag, however, the Tax Foundation estimates revenue would be closer to $1.6 trillion. Alex Durante, a senior economist at the Tax Foundation, told Newsweek that tariffs can be a weak long-term revenue tool because if supply chains shift back to the U.S., “that would actually cause tariff revenue to fall over the long term.”
The think tank also warned that household-level costs could offset “much of the economic benefits” from Trump’s signature tax legislation, the One Big Beautiful Bill Act, signed in July, while still “falling short” of fully funding the law’s tax cuts. The impact, the Tax Foundation said, is spread across income groups, though it estimates that the top 1% of earners would see a smaller reduction in after-tax income than others.
In its report, the Tax Foundation argued that economists broadly view free trade as raising output and income, while trade barriers reduce both. It said historical evidence shows tariffs tend to raise prices and reduce the availability of goods and services, leading to lower income, weaker employment, and reduced economic output.
A White House spokesperson, Kush Desai, told ABC News in response to the report that while the average tariff rate has risen sharply, inflation has cooled, real wages have increased, GDP growth has accelerated, and investment has continued flowing into U.S. production and hiring.
The Supreme Court is currently considering whether the president’s emergency powers under the International Emergency Economic Powers Act (IEEPA) allow tariffs to be imposed in the manner used over the past year, with a decision expected soon, according to the Tax Foundation. Durante said that if those tariffs were struck down, the estimated per-household cost would fall to $400 in 2026.
Meanwhile, efforts in Congress to roll back the tariffs are continuing after a small number of Republicans joined House Democrats to block measures that would have barred challenges to the duties through July 31.
