Tax Foundation Analysis: Trump’s 2025 Tariffs Imposed $1,000 Average Cost on American Households

A comprehensive report released by the non-partisan Tax Foundation on February 6 has detailed the significant financial consequences of the trade policies enacted by the Donald Trump administration. The study found that the tariffs introduced led to an average increase in annual expenditures for American households of approximately $1,000 throughout 2025. Experts warn that if these protectionist measures are maintained through 2026, the projected additional costs for each family are expected to rise to $1,300.

Analysts at the Tax Foundation highlighted that these trade levies represent the most substantial percentage increase in the United States' tax-to-GDP ratio since 1993, reaching 0.54 percent of the national GDP by 2026. In terms of total revenue, the federal government collected $264 billion in customs duties during 2025, with the net tax gains specifically from the new tariffs estimated at $132 billion. These figures stand in stark contrast to the significantly higher estimates provided by the White House, suggesting a major discrepancy in official financial reporting.

The scope of these tariffs was vast, impacting roughly 67% of all goods imported into the United States over the last year. The price hikes were most visible in sectors such as consumer electronics, toys, automobiles, and essential food items. As a result, the average effective tariff rate in the U.S. climbed to nearly 10% in 2025, the highest level recorded since 1946. Furthermore, research from the Federal Reserve Bank of New York determined that by August 2025, up to 94% of the import tax burden was being paid by American companies and households, contradicting claims that the costs are primarily borne by foreign exporters.

While the broader annual inflation rate was recorded at 2.7% in December 2025, the price increases for specific grocery categories were much more pronounced. The cost of coffee surged by 33.6%, ground beef rose by 19.3%, and leaf lettuce increased by 16.8% compared to the previous year. These tariff-induced price shifts effectively cancelled out many of the economic benefits that middle-income families had received from previous tax cuts. Despite the Federal Reserve implementing interest rate reductions toward the end of 2025, inflation remained above the 2% target, and consumer confidence levels remained notably low.

In addition to general trade measures, the Trump administration applied specific duties of 25% on imports from South Korea and 20% on goods from the European Union. These actions have led to ongoing legal challenges regarding the administration's authority under the International Emergency Economic Powers Act (IEEPA), following oral arguments presented to the Supreme Court in November 2025. Jeffrey Frankel, a professor at Harvard University, noted that the economic impact of the 2025 tariffs has eclipsed the trade policies of Trump’s first term and even the historic Smoot-Hawley Tariff Act of 1930.