Newsweek - Trump Tariffs Could Cost Average American Household $4,200 a Year

Published Apr 02, 2025 at 10:20 AM EDT
By Khaleda Rahman

President Donald Trump imposing a 20 percent tariff could cost the average American household up to $4,200 a year, according to an analysis by The Budget Lab at Yale University.

Why It Matters
Trump is set to announce "reciprocal" tariffs on Wednesday, which he has called "Liberation Day."

He has said the tariffs will boost United States manufacturing and address unfair trade practices. However, some economists say the move could cause the economy to slide into a recession and that importers would likely pass some of the cost of the duties to consumers in the form of higher prices.

What To Know
The Budget Lab's analysis found that a broad 20 percent tariff would raise consumer prices by between 2.1 and 2.6 percent if the Federal Reserve did not take action.

"This is equivalent to a loss of purchasing power of $3,400-4,200 per household on average in 2024 dollars," the analysis said.

The analysis found that tariffs would burden households with lower incomes more.

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