American households are paying the literal price for Trump’s tariffs – here’s how much

New report puts a price on tariffs

The average American household will pay about $1,300 in tariff-related costs this year, up from about $1,000 in 2025.

That’s according to a Feb. 6 report from the Tax Foundation, a nonpartisan research group that generally favors lower taxes. The projection assumes current tariffs stay in place through 2026.

The jump reflects new tariffs imposed and scheduled since President Donald Trump started his second term.

Tariff rates hit levels not seen since 1946

The numbers tell a striking story. The average tariff rate on U.S. imports roughly quintupled over 2025, climbing from about 2.6% to 13%.

The weighted average now sits at 13.5%, up from just 1.5% in 2022, according to World Bank data cited in the report. The effective rate, which factors in how buyers shift their spending to avoid tariffs, stands at 9.9%.

The Tax Foundation says that’s the highest effective tariff rate since 1946.

Group calls it the biggest tax hike since 1993

The Tax Foundation describes the tariffs as the largest U.S. tax increase as a share of GDP since 1993, at 0.54% of GDP for 2026.

That 1993 comparison points to the Omnibus Budget Reconciliation Act that President Bill Clinton signed, which combined tax hikes and spending cuts to shrink the deficit.

In dollar terms, the tariffs brought in an estimated $132 billion in net tax revenue in 2025 alone.

Studies show Americans pay most of the cost

President Trump has said repeatedly that foreign producers and middlemen pay the tariffs, not American consumers.

But a Federal Reserve Bank of New York report released Feb. 12 found that American businesses and consumers shouldered nearly 90% of tariff costs in 2025.

From January through August, U.S. importers absorbed 94% of the costs. By November, that share dipped to 86%.

The Germany-based Kiel Institute for the World Economy reached a similar finding, estimating U.S. importers and consumers bore 96%.

White House says the economy is strong

The White House pushed back on the report’s conclusions.

Spokesman Kush Desai said tariff rates have risen nearly tenfold in the past year, yet inflation has cooled, real wages have risen, and GDP growth has picked up.

Trump wrote in a Wall Street Journal op-ed that tariffs promote growth, pointing to stock market highs and new business investments in the U.S. Not all analysts agree with the Tax Foundation’s math, either.

The Coalition for a Prosperous America, a pro-tariff group, has questioned how the household cost figure is calculated.

Tariffs may eat into tax cut savings

The Tax Foundation warned that tariff costs could cancel out much of the savings from the One Big Beautiful Bill Act (OBBBA), Trump’s signature tax law signed July 4, 2025.

That law made the 2017 tax cuts permanent, added new deductions for tips and overtime, and raised the cap on state and local tax deductions.

The Tax Foundation previously estimated those cuts would lower individual taxes by about $129 billion, with average refunds rising by up to $1,000.

Lower-income families feel the squeeze most

The tariff burden falls hardest on those who can least afford it. Erica York, vice president of federal tax policy at the Tax Foundation, said lower-income filers are on average worse off under the combined effect of tariffs and tax cuts in 2025.

Because several OBBBA tax provisions expire after 2028, the bottom 20% of earners could see a net drop in after-tax income by 2034.

The top 1% of earners, meanwhile, see a smaller hit from tariffs compared to other income groups.

Projected revenue comes with a GDP cost

Over the next decade, the Tax Foundation projects tariffs will bring in about $2 trillion in revenue before accounting for foreign retaliation.

Factor in the economic drag and retaliation from trading partners, and that drops to about $1.6 trillion. The tariffs are also projected to shrink long-run U.S. GDP by 0.5% before retaliation, and by 0.7% with it.

The Yale Budget Lab has estimated a similar long-run GDP reduction of about 0.3%.

Supreme Court could reshape the tariff picture

The Supreme Court heard oral arguments on Nov. 5, 2025, on whether a law called the International Emergency Economic Powers Act (IEEPA) gives the president authority to impose tariffs. Both lower courts ruled that it does not.

If the justices agree, the Tax Foundation’s Alex Durante told Newsweek the per-household tariff cost could fall to about $400 in 2026. The justices next take the bench on Feb. 20 and could issue a ruling at any time.

Six House Republicans voted to repeal tariffs

On Feb. 11, six House Republicans joined Democrats to pass a resolution repealing Trump’s tariffs on Canada, 219 to 211. Reps. Bacon, Kiley, Massie, Hurd, Fitzpatrick, and Newhouse crossed party lines.

The resolution would end the national emergency declaration Trump used to justify the Canada tariffs.

But the vote is largely symbolic because Trump could veto it, and the margin fell well short of the two-thirds needed to override.

Trump warned Republicans not to break ranks

During the House vote, Trump posted on Truth Social warning that any Republican who votes against tariffs will face consequences at election time, including in primaries.

House Speaker Mike Johnson called the vote a “fruitless exercise” and pointed to the president’s veto power.

Rep. Hurd defended his vote, saying that normalizing broad emergency trade powers sets a precedent for future presidents of either party.

The Senate has passed similar measures, with four Republican senators crossing party lines.

Several battles loom ahead on tariffs

The Supreme Court ruling, expected soon, could change the entire tariff landscape.

Democrats have unlocked procedural tools to force more House votes on tariffs against Mexico and on so-called “liberation day” tariffs.

The 2026 midterm elections loom, with polls showing Americans largely disapprove of the tariffs.

If the court strikes down IEEPA tariffs, the administration has signaled it may turn to other legal authorities like Section 232 or Section 301.

This article was created with AI assistance and human editing.

Read more from this brand:

• US Small Businesses Paying $25,000 Extra a Month Due to Tariffs
• Congress Wants to Send You $600 From Tariff Money But the Numbers Dont Work
• Trump’s tariffs cost U.S. households about $1,000 in 2025