As President Donald Trump began his second term last year, he doubled down on tariffs against foreign trading partners, arguing the measures would strengthen the U.S. economy and protect American workers. But new research suggests the costs of those policies have fallen squarely on U.S. households.
New analysis from the Tax Foundation details the economic impact of tariffs imposed under Trump’s use of the International Emergency Economic Powers Act (IEEPA), targeting imports from countries including China, Canada, Mexico and the United Kingdom. The findings show that the tariffs have pushed up consumer prices, effectively raising the cost of living for Americans.
According to research by the Kiel Institute for the World Economy, U.S. consumers have borne nearly the entire burden of the tariffs. The study estimates that Americans absorbed 96 percent of tariff-related price increases. Researchers analyzed more than 25 million shipment records covering over $4 trillion in U.S. imports.
“The tariffs are an own goal,” said Julian Hinz, research director at the Kiel Institute and one of the study’s authors. “The claim that foreign countries pay these tariffs is a myth. The data show the opposite: Americans are footing the bill.”
The findings come as Trump has continued to tout his economic agenda and recently issued updates on when Americans could receive $2,000 stimulus checks this year.
Economists increasingly describe the tariffs as functioning like a domestic tax. One widely cited analysis concludes that Trump’s tariffs represent the largest U.S. tax increase as a share of GDP since 1993, amounting to an estimated 0.54 percent of GDP in 2026.
The White House has rejected criticism of the tariff program. In a statement to ABC News, spokesman Kush Desai said that while America’s average tariff rate has increased nearly tenfold over the past year, broader economic indicators have improved.
READ: Trump tariffs linked to sharp rise in US trade deficit (January 30, 2026)
“Inflation has actually cooled, real wages have risen, GDP growth has accelerated, and trillions in investments continue pouring in to make and hire in America,” Desai said.
Despite the administration’s defense, estimates suggest the financial burden on households is set to grow. Analysts project that tariff-related costs will rise from about $1,000 per household last year to roughly $1,300 this year, with consumers expected to absorb almost all of the increase through higher prices.
The impact is already visible across everyday purchases. Prices for apparel and leather goods have risen by 34 percent and 36 percent respectively, while the average cost of a car has increased by about $5,700, according to data cited by the Eurasia Review.
The effects are also unevenly distributed. Lower-income households face an effective tax increase of about 1.9 percent, compared with 1.4 percent for higher-income earners, according to the analysis.
Meanwhile, the legality of the IEEPA tariffs is under review by the U.S. Supreme Court. During oral arguments in November, several justices expressed skepticism over whether the law grants the president authority to impose such sweeping tariffs. The Court is currently in winter recess, with February 20, 2026 listed as the next scheduled session and a potential date for a ruling.
Reacting on Truth Social, Trump warned of severe consequences if the Court overturns his authority. He said the U.S. could face massive repayment obligations to American companies.
“And that doesn’t include the amount of payback that countries and companies would require for the investments they are making … to avoid the payment of tariffs,” Trump wrote. “When these investments are added, we are talking about trillions of dollars.”
“If the Supreme Court rules against the United States of America on this national security bonanza,” he added, “WE’RE SCREWED.”