Trump tariffs to cost families $4,700 per year, Yale study says

Trump signed an order on April 2 imposing a minimum 10% tariff on goods imported from nearly every country, with some nations hit with significantly higher rates. 

Under that framework, consumers would face an overall average effective tariff rate of 27%, the highest since 1903, according to a Yale Budget Lab analysis released Thursday.

“Tariffs are a regressive tax, especially in the short-run,” the analysis says. “This means that tariffs burden households at the bottom of the income ladder more than those at the top as a share of income.”

On April 9, Trump instituted a pause on some of those tariffs, though the effect will remain significant, according to the Yale analysis. 

Price increases as a result of the revised April 9 tariff plan will average 2.9 percent, the equivalent to consumers of an annual $4,700 loss. 

“The 2025 tariffs disproportionately affect clothing and textiles, with consumers facing 64 percent higher apparel prices in the short-run,” the analysis says. “Apparel prices stay 27 percent higher in the long-run.”

Yale also predicts the unemployment rate rising by .6% by the end of the year. 

The significant size of the tariffs placed on China, a maximum of 145%, means American manufacturers and retailers will likely find non-Chinese alternatives, though the Yale analysis predicts that market shift away from Chinese goods will have only a moderate impact, bringing the effective tariff rate to 18.5 percent, the highest since 1933.

When that consumer shift will happen is uncertain: “Some shifts are likely to happen quickly — within days or weeks — while others may take longer,” the analysis says. 

Specifically, Yale researchers wrote that clothing, textiles, food and automobile prices will increase the most and stay higher for a longer period of time. 

On clothing items, the Yale Budget Lab Analysis predicts a 64 percent price increase immediately dropping to a 27 percent increase after consumers and retailers shift buying habits. Textiles are expected to increase 44 percent, dropping to 17 percent after the consumer shift. 

Food prices are expected to rise 2.6 percent and then remain 3 percent higher than they are currently. Fresh produce prices in particular will be 5.4 percent more expensive and then stabilize at 3.9 percent higher. The price of a new car is expected to increase by $9,000 on average. 

Yale is not the only school to release dire predictions following Trump’s tariff announcement. The Wharton business school at the University of Pennsylvania, the business school from which Trump graduated, predicted that the tariff plan would reduce the nation’s gross domestic product by 8% and wages by 7%, resulting in a $58,000 lifetime loss for a middle-income family. 

Many of Connecticut’s representatives to Congress have argued against the Trump tariff plan, among them Sen. Richard Blumenthal, D-Conn., who said in a news release that, “Trump’s trade war threatens immediate harm and hardship for the United States — a recession and higher prices for consumers buying cars and gas to commute to work, groceries to feed their families, energy to run their air conditioning this summer, even clothing for their kids.” 

“It’s another flagrant attack on our democracy,” he said.