Updated May 12 with new information based on preliminary agreements reached with the UK and China.
On April 2, President Trump unveiled an array of new tariffs, including a 10 percent minimum tariff on all imported goods and higher "reciprocal" tariff rates for about 60 countries. Prior to that announcement, the administration had levied separate tariffs on Canada, China, and Mexico, as well as specific goods including automobiles, auto parts, steel, and aluminum.
On April 9, President Trump announced a combined 145 percent rate on imports from China and a 90-day pause on certain higher “reciprocal” tariffs he announced on April 2. During the pause, the 10 percent minimum tariff remains in effect for all countries, as well as other tariffs announced before April 2.
On May 8, the White House announced an agreement with the United Kingdom to exempt cars, steel, and aluminum products from the 10 percent tariff rate.
On May 12, the White House announced it would lower the tariff on Chinese imports from a combined 145 percent to 30 percent.
The Tax Policy Center continues to track these announcements and will update this page with descriptive information and estimates of how tariffs will affect federal revenues, households, and the economy.
TPC Analysis of Trump Tariffs
TPC estimates that tariffs announced by the Trump administration through April 2, 2025 would raise about $3.3 trillion for fiscal years 2026 through 2035 and reduce real income for the average taxpayer by about $2,900 in 2026. The estimate of the change in real income includes the burden on consumers of both paying more for taxed goods and from switching to less preferred goods.
If the lower tariff rates in effect during the announced 90-day pause (beginning April 9, 2025) remain in effect permanently, the tariffs would raise about $1.7 trillion over the same 10-year period and reduce average real income by $3,100 in 2026.
The temporary policy raises substantially less revenue than the April 2nd tariffs, but burdens consumers by a similar amount, largely because of the additional welfare costs of consumers being forced to forgo or substitute away from Chinese goods facing very high tariffs.
These figures are highly uncertain and do not include the effects of retaliatory tariffs imposed on US exports or macroeconomic effects on the overall size of the US economy.
How the April 2nd tariffs were devised
According to the Office of the United States Trade Representative (USTR), tariff rates were calculated based on 2024 trade flows. This formula levies higher taxes against imports from nations with whom the US has a trade deficit (when the US imports more than it exports).
Under the April 2 announcement, Canada and Mexico retain the previously implemented 25 percent tariffs (goods covered by the USMCA trade agreement are exempt), while imported goods from China (which had already faced two rounds of 10 percent tariffs) face an additional 34 percent tariff, which at the time brought its total rate to 54 percent. Certain goods that face separate product-specific tariffs are exempt from these new tariffs, including steel, aluminum, autos, pharmaceuticals, and semiconductors.
Other product-specific tariff policies
Steel and aluminum:
- As of March 12, reinstatement of 25 percent tariffs on steel imports and increased tariffs on aluminum imports to 25 percent; imposes measures to curb tariff “evasion” and applies the levies to downstream products
- Removal of prior exemptions for the following trading partners: Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom
Automotive:
- As of April 2, 25 percent tariffs on passenger vehicles, as well as engines, powertrain parts, and electrical components
- USMCA imports can receive certification of US-based vehicle content for exemption
Prior TPC Analyses:
Blog: Tariffs Are Costly, And So Is Tariff Uncertainty (April 2025)
Blog: Trump’s Tariffs Will Raise Much Less Than He Expects (April 2025)
Fiscal Fact Explainer: How Do Tariffs Work? (December 2024)
Blog: Trump’s Proposed Tariffs Would Fall Hardest on States in the Midwest and South (October 2024)
Research Brief: Tariffs, Trade, China, and the States (October 2024)
Blog: A More Aggressive Trump Tariff Would Lower Household Incomes By Nearly $3,000 (October 2024)
Blog: Trump Tariffs Would Raise Household Taxes And Slow Imports (August 2024)
