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The Fiscal, Economic, and Distributional Effects of 20% Tariffs on China and 25% Tariffs on Canada and Mexico (budgetlab.yale.edu)
submitted 3 weeks ago* (last edited 3 weeks ago) by RedWizard@hexbear.net to c/news@hexbear.net
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Key Takeaways

  • The Budget Lab modeled the total effect of the planned 25% Canada & Mexico tariffs and the 10% China tariffs, as well as the 10% China tariffs already in effect.
  • The policy is the equivalent of a 7 percentage point hike in the US effective tariff rate, raising it to the highest since 1943.
  • The price level rises by 1.0-1.2%, the equivalent of an average per household consumer loss of $1,600–2,000 in 2024$.
  • Real GDP growth is 0.6 lower in 2025. In the long-run, the US economy is persistently 0.3-0.4% smaller, the equivalent of $80-110 billion annually in 2024$.
  • The tariffs to date raise $1.4-1.5 trillion over 2026-35 conventionally-scored, and $300-360 billion less if dynamic revenue effects are taken into account.
  • Tariffs are regressive taxes. Losses for households at the bottom of the income distribution would range between $900–1,100.
  • Electronics and clothing are disproportionately affected. Motor vehicles and food see above-average price increases as well.
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this post was submitted on 09 Apr 2025
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