Previous tariff actions taken by the Trump Administration, added together with those announced today, impose a large and growing cost on U.S. taxpayers and exporters.
Taxpayer Impact:
Trump’s tariffs represent a massive $271.6 billion per year tax increase on Americans, based on the average of estimates from the White House, the Tax Foundation, the Penn Wharton Tariff Simulator, and the Budget Lab. That’s an average of $2,048 for every U.S. household each year, or about $171 per month in new taxes. New tariffs that are currently under consideration by the White House could add even more to the cost. (Estimates as of 7/30/2025)
According to the Budget Lab, the average U.S. tariff rate is now higher than at any point since the Great Depression.
Based on their total size, Trump’s tariffs represent the biggest peacetime U.S. tax increase in history.
Some politicians have proposed rebating these taxes back to taxpayers. A better approach is to stop collecting the taxes in the first place.
Export Impact:
Much has been made of the relatively low levels of retaliation against U.S. tariffs. However, the bigger risk to U.S. exporters comes not from foreign retaliation but from the impact of U.S. tariffs on the ability of our trading partners to afford American goods.
The more we import, the more we export. Trump’s tariffs will reduce U.S. imports significantly, leaving our trading partners with fewer dollars to spend on made-in-the-USA exports. Figure 1 shows how export growth and import growth are closely linked.
Figure 1: Imports and Exports of Goods and Services
Each percentage-point increase in the U.S. tariff rate could reduce imports by 2%. Increasing our average tariff on the European Union (EU) from 1.2% in 2024 to 15% would be a 13.8 percentage point increase, which could in turn reduce U.S. imports of goods from the EU by 27.5%. This would leave the EU with $164.6 billion less a year to spend on our exports, everything else being equal. The same export-loss analysis applies to other trading partners hit with big tariffs.
Even in the absence of tariff retaliation by foreign governments, exporters will be further harmed as people in other countries boycott U.S. products or pull them from the shelves.
National Taxpayers Union (NTU) has supported President Trump’s statements in support of low-tariff reciprocity.
By abandoning reciprocity and the pursuit of mutually beneficial agreements that cut taxes and open markets, for the first time in history we have trade deals that increase taxes and close foreign markets. Unless the United States changes course, the end result will be trillions of dollars in new taxes on Americans and fewer opportunities to sell our goods to the 95% of the world’s population who live in other countries.