The Impact of Trump’s Proposed Tariffs

President-elect Donald Trump during his campaign proposed significant tariffs on products imported from other countries. While targeted tariffs can have a useful role in trade policy, economists agree that tariffs, particularly broad-based tariffs, raise the prices paid by consumers and businesses on the goods and services they buy. Our recent analysis found that the sweeping tariffs proposed by Trump, which are far larger than any on the books today, would significantly raise the prices faced by American consumers across the income scale.

While Mr. Trump mentioned different specific figures at different times, our analysis examined his proposal for a new 60 percent tariff on goods imported from China and a 20 percent tariff on goods imported from other countries.

If his proposal were in effect in 2026, we found:

• For the poorest fifth of Americans, who will have incomes of less than $29,000 in 2026, the tariffs will impose a tax increase equal to 5.7 percent of their income that year.
• For the middle fifth of Americans, who will have incomes between $55,000 and $94,000 in 2026, the tariffs will impose a tax increase equal to 4.6 percent of their income.
• The richest 1 percent, who will have incomes of more than about $915,000, will face a smaller tax increase relative to their income, just 1.4 percent.

For further discussion of the analysis underlying this work, see A Distributional Analysis of Donald Trump’s Tax Plan.

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