Overview
- New York Fed researchers reported that U.S. firms and consumers bore 94% of tariff costs through August 2025, easing to 86% by November, with tariffed import prices rising about 11% more than untariffed goods as companies reorganized supply chains.
- The Tax Foundation estimates the levies raised average household costs by about $1,000 in 2025 and will reach $1,300 in 2026, calling the program the largest U.S. tax increase as a share of GDP since 1993 and the highest average tariff rate since 1946.
- White House economic adviser Kevin Hassett called the New York Fed paper an embarrassment and said its authors should be disciplined, arguing that inflation has cooled and real wages have risen despite the tariffs.
- The legality of the tariff program faces an expedited U.S. Supreme Court review after states and small businesses won in lower courts challenging the president’s use of emergency powers under the 1977 law.
- Fiscal and price effects remain contested: federal collections from tariffs and other excise taxes jumped to $288.5 billion in 2025 from $98.3 billion in 2024, while an NBER analysis estimated only about 20% of tariff costs reached consumers directly and added roughly 0.7 percentage points to inflation.