New research from the Tax Foundation, a non-partisan think tank, has found that President Donald Trump's tariffs are set to cost the average American household an additional $1,300 in 2026, up from $1,000 in 2025. The study describes the levies as the largest US tax increase as a percentage of GDP since 1993.
The effective average tariff rate on all US imports now stands at 9.9 percent, the highest since 1946. The tariffs raised $132 billion in revenue last year and are projected to generate roughly $2 trillion over the next decade, though foreign retaliation could reduce that figure to $1.6 trillion.
The White House dismissed the findings, with spokesperson Kush Desai noting that inflation has cooled and real wages have increased despite the tariffs. However, the study warns that tariffs act as a tax on consumers, raising prices and reducing economic output. It projects a 0.5 percent reduction in GDP.
Democratic lawmakers have criticised the tariffs, with Senator Chris Coons stating they will raise costs on everyday goods. Public opinion appears to align with this view, as a Pew Research Center poll found 60 percent of Americans disapprove of the increased tariffs.
The US Supreme Court is set to rule on whether President Trump has the authority to unilaterally impose tariffs, with Trump warning that a ruling against him would be detrimental.
