In early 2025 the U.S. government announced a broad package of tariffs targeting imported goods. New levies apply to everything from Chinese imports to steel, aluminum and automobiles. Research from the Budget Lab at Yale University sheds light on how these tariffs affect prices, households and economic growth.
Aggregating all U.S. tariffs enacted in 2025 raises the effective tariff rate to 22.5%—the highest since 1909. The Budget Lab estimates that these tariffs increase consumer prices by 2.3% in the short run. That equates to an average household loss of about $3,800 in 2024 dollars. Even the April 2 announcement alone (which added a 10% minimum tariff on most imports) would raise prices 1.3% and cost families roughly $2,100.
Apparel and textiles are hit especially hard, with clothing prices rising roughly 17% under the full tariff schedule.
Tariffs may protect domestic industries in the short term, but the Budget Lab notes that the April 2 tariffs alone reduce U.S. GDP growth by 0.5 percentage points in 2025. Combining all 2025 tariffs cuts the level of GDP by 0.4–0.6% over the long run. While the levies raise revenue, they also drag on overall economic output.
Not all sectors feel the pinch equally. Industries subject to foreign competition, such as domestic steel producers, may benefit from higher tariffs, whereas consumers of imported goods face higher prices. Households at the bottom of the income distribution lose about $1,700 per year from all tariffs, whereas middle‑income families face losses around $3,800.
Policy debates will continue over whether tariffs are a justified tool of trade policy. What’s clear from the data is that the costs are real and widely felt across the economy.
Budget Lab at Yale University, “Where We Stand: The Fiscal, Economic, and Distributional Effects of All U.S. Tariffs Enacted in 2025 Through April 2.”
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