*Update, April 9, 2025: On the evening of Tuesday, April 8, the Trump administration issued a proclamation amending China’s reciprocal tariff rate to 84 percent. Combined with the Trump administration’s previous 20 percent tariff on imports from China, the overall tariff rate for China now stands at 104 percent. Assuming complete pass through of the tariff, consumers could expect to see the price of goods made in China and exported to the United States increase by that factor: a Playstation 5 from $499 to $1,018 (a $519 increase) and car seat from $59 to $120 (a $61 increase).
Last week, the Trump administration announced sweeping new taxes on imports from nearly all countries. A 10 percent baseline tariff took effect on April 5, and country-specific tariffs as high as 50 percent will start on April 9. Empirical research shows that, over the past several years, the cost of U.S. tariffs has been passed through entirely to consumers. According to the Budget Lab at Yale, Trump’s tariffs are expected to raise prices this year by 2.3 percentage points, costing American households an average of $3,800 annually. Economic experts, including Federal Reserve Chairman Jerome Powell, expect the new tariffs to fuel higher inflation.
The economic damage of Trump’s tariffs makes a recession more likely. Last week’s “reciprocal” tariff announcement sent stock markets spiraling globally—with a 10 percent drop in the S&P 500 in two days—wiping out trillions in market value. On Sunday, Goldman Sachs updated its probability of recession from 35 percent to 45 percent, saying that if the April 9 tariffs take effect, “we expect to change our forecast to a recession.” J.P. Morgan last week increased its recession probability to 60 percent in anticipation of growing trade wars.
With few exceptions, the so-called reciprocal tariffs apply to all imported goods. That includes goods which are not feasible to grow or make in the United States at the scale needed to satisfy American demand. For example, less than 1 percent of coffee consumed in the United States is grown domestically. And about 60 percent of fresh fruit is imported.
With the tariffs fully in effect, Americans can expect to pay more for groceries, shoes and clothing, household necessities, auto parts, and recreational items. Figure 1 provides illustrative examples of price hikes that Americans could see if Trump’s country-specific tariffs are fully passed through to consumers. For example:
- A toddler clothing set made in Cambodia (49 percent tariff) priced at $24 now could cost $35.76.
- Jeans made in Egypt (10 percent tariff) priced at $39.98 now could cost $43.98.
- A soccer ball made in Pakistan (29 percent tariff) priced at $17.99 now could cost $23.21. About 70 percent of the world’s soccer balls are made in northeast Pakistan.
- Coffee from Brazil (10 percent tariff), the largest source of coffee consumed in the United States, priced at $8.30 now could cost $9.13.
- A 2025 SUV made in Mexico priced at $31,395 would be subject to the Trump administration’s 25 percent auto tariffs—and could cost $39,244. Previous modeling by the Budget Lab projected that, as a result of the 25 percent auto tariffs alone, “Motor vehicle prices rise by 13.5% on average, the equivalent of an additional $6,400 to the price of an average new 2024 car.”
The Trump administration’s tariff rates were unveiled without a launch of major complementary policies to ramp up American production, and do not account for whether production could be reshored. The tariff formula also does not consider whether a country is a critical U.S. economic or security partner; engages in nonmarket practices; or maintains industries with adequate labor or environmental standards. Americans will pay the price for the Trump administration’s chaotic trade war. President Trump has rolled out a regressive tax that will hit lower-income households hardest, all while pressuring Congress to pass trillions in tax breaks that benefit the wealthy.
Acknowledgments
The author thanks Ryan Mulholland, Mimla Wardak, Lily Roberts, Natalie Baker, Amina Khalique, and Sophie Cohen for valuable input, and Bill Rapp for designing the data visualization.