The United States will see its average effective tariff rate climb to 6.6 percent in 2026, the highest level in 57 years, according to a July 2026 report from the Tax Foundation analyzing the economic impact of Trump-era trade measures. The analysis examines tariffs imposed during President Trump's second term, which has seen U.S. tariff policy change more than 50 times since it began. In calendar year 2025, customs duties brought in $264 billion for the federal government, up from $79 billion in 2024, the report finds.
The Tax Foundation estimates that before the Supreme Court's Learning Resources decision invalidated certain tariffs, U.S. imports faced a weighted-average applied tariff rate of 15.2 percent, up dramatically from 1.5 percent in 2022 according to World Bank data. The applied rate peaked in April 2025 shortly after "Liberation Day" tariffs took effect and has fluctuated significantly since. With a temporary 10 percent Section 122 tariff currently in effect, the applied rate stands at 10.8 percent, projected to rise to 11.8 percent once that tariff expires and announced pharmaceutical, Section 301, and Canada-specific tariffs take effect. The actual average effective tariff rate reached its highest point since 1947 in 2025, jumping from 2.4 percent in 2024. However, approximately $166 billion in revenue collected from now-illegal IEEPA tariffs must be refunded to importers, the analysis notes.
The report estimates that Section 232, Section 301, and Section 338 tariffs will shrink long-run U.S. GDP by 0.4 percent before accounting for foreign retaliation, with an additional 0.2 percent GDP reduction from retaliatory measures already imposed or threatened as of September 2025. The tariffs are projected to eliminate 367,000 full-time equivalent jobs, with Section 232 measures accounting for 228,000 of those losses. For American households, the Tax Foundation calculates that Section 232 tariffs alone will create an average tax burden of $600 in 2026, rising to $900 when other tariff measures are included—down from the $1,000 average per household in 2025 when now-invalidated IEEPA tariffs were in effect. The organization notes these averages don't capture extra costs from higher-priced substitutes and reduced consumer choice.
The analysis explains that tariffs generate less net revenue than direct collections suggest because they mechanically shrink the tax bases for income and payroll taxes. On a conventional basis, the Tax Foundation projects the tariffs will increase federal tax revenue by $1.6 trillion from 2026 through 2035. But on a dynamic basis—incorporating the negative economic effects of the tariffs—that 10-year revenue figure drops to $1.2 trillion, about $426 billion less. When accounting for imposed retaliatory tariffs, revenue falls by another $136 billion over the decade. The report also challenges one of President Trump's stated goals, noting that a country's balance of trade reflects broader macroeconomic balances between saving and investment rather than trade policy alone. Despite the sweeping tariff increases, the trade deficit fell by just $2.1 billion in 2025 compared to 2024, driven entirely by an increase in the services trade surplus while the goods deficit actually grew by $25.5 billion year over year.
The Tax Foundation's distributional analysis shows the tariffs will reduce after-tax incomes across all income groups in 2026 by roughly 0.8 percent, with the top 1 percent seeing a slightly smaller 0.5 to 0.7 percent reduction. The newly imposed and scheduled tariffs will boost federal tax revenues by $121 billion in 2026, equal to 0.4 percent of GDP and ranking as the 19th largest tax increase since 1940. The report concludes that because the Section 122 tariff expires after 150 days, it will have no long-run economic impact, leaving the remaining measures to shape trade policy going forward.