One year after Donald Trump unveiled his sweeping tariff plan in the White House Rose Garden, the bill for that experiment is still showing up in American households’ budgets. Apparently tariffs do not, in fact, politely disappear once the speeches are over.
At the ceremony in Washington, Trump announced a 10 percent global tariff as part of a broad executive order he called “Liberation Day.” The reaction was immediate. Markets tumbled sharply, posting their worst drop since the pandemic, and countries rushed either to strike deals with Washington or retaliate with tariffs of their own.
The legal fight is still going
The next major turn came on February 20, when the Supreme Court ruled that most of Trump’s tariffs were illegal. The justices said the president does not have the power to impose broad, open-ended tariffs simply by declaring a national emergency.
That ruling did not end the trade fight. Within hours, Trump leaned on a different law to impose a temporary tariff, which is scheduled to expire in July. So the tariffs changed shape rather than vanishing, which is a familiar sort of workaround in Washington.
Even though the original measures have now been struck down, their economic effects have already done the damage. Economists at the New York Federal Reserve found that the average effective US tariff rate climbed from 2.6 percent to more than 13 percent between the tariffs taking effect and the Supreme Court’s decision. That is the highest effective tariff level the US has seen since World War II.
What tariffs actually do
Tariffs are hardly a novelty. US administrations of both parties have used them for years to protect specific industries, pressure trading partners or gain leverage in negotiations.
In plain terms, a tariff is a tax on imported goods and services. It makes foreign products more expensive, with the idea that shoppers will buy domestic alternatives instead. In theory, that sounds elegant. In practice, someone still has to pay.
Who paid the price
Trump said tariffs would shrink the trade deficit and make the country richer. The data suggest a less flattering outcome for consumers.
According to the Tax Foundation, US households paid more than $1,000 extra in 2025 for the same groceries, clothing and cars they were already buying. The Penn Wharton Budget Model estimates that the US collected more than $287.1 billion in customs duties in 2025, and $64.4 billion so far in 2026.
There may also be a large refund headache ahead. After the Supreme Court ruling, the government could be forced to repay as much as $175 billion to businesses that paid the duties, according to Penn Wharton.
The burden stayed at home
The Trump administration insisted tariffs were really taxes on foreign governments, especially China and the EU, and that those countries would absorb the cost. The evidence points in the other direction.
Economists at the Federal Reserve Bank of New York found that nearly 90 percent of the economic burden fell on US businesses and consumers, while foreign exporters absorbed only a small share. New York Fed surveys also found that about half of tariff-hit businesses raised their prices, passing the cost straight through to customers.
The pain was not evenly shared. Lower-income households, which spend a larger share of their earnings on essentials such as food, clothing and transportation, were hit hardest. That tends to happen when basic goods get more expensive, a detail public policy sometimes discovers only after the invoices arrive.
In November, the Trump administration signed an executive order exempting more than 237 categories of food imports from the tariff regime. Coffee, beef and oranges were among the products removed. It was a notable retreat and an overdue admission of what economists had warned for months: tariffs on everyday goods hit Americans first and hardest.
With Trump’s IEEPA tariffs now being replaced by a flat 10 percent tariff, the Tax Foundation projects that the average cost to households will ease to about $600. That is better than $1,000, but it is still money coming out of consumers’ pockets, which is not usually described as a victory in most shopping aisles.
