A new report from the Budget Lab at Yale University finds that President Trump‘s trade policies will raise U.S. consumer prices by nearly 2% in the short term, costing the average middle-class household over $2,200 per year.
The updated estimate is down from $3,400 projected in April, largely due to Trump’s 90-day reduction in tariffs on Chinese imports from 145% to 30% and a new trade deal with the United Kingdom affecting auto imports.
Consumers now face an average effective tariff rate of 17.8%—the highest since 1934. The study notes that shoes and apparel are especially impacted, with footwear prices rising 15% and clothing 14%. Importers are passing these added costs to consumers.
The report also warns that the tariffs could raise unemployment by 0.4 percentage points by late 2025. Current U.S. tariffs include a 10% baseline on most imports and 25% on steel and aluminum.
Despite the costs, Trump maintains tariffs are essential to revitalizing U.S. manufacturing.
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