Featured Image Credit: Getty Images/Andrew Harnik
Topics: Donald Trump, Money, US News, Food and Drink
Emily Brown
Topics: Donald Trump, Money, US News, Food and Drink
A new report from Yale University has revealed how much Donald Trump's 'Liberation Day' tariffs could impact average yearly costs in a US household.
Trump imposed hefty tariffs on dozens of countries when he appeared in the White House's Rose Garden on April 2, armed with multiple boards listing all the countries he's targeting and exactly how much they're set to be charged.
The tariffs come as Trump seeks to boost the economy in the US and 'address the national emergency posed by the large and persistent trade deficit', however, his actions will have notable impacts on the everyday consumer.
In a report released on April 2, Yale's Budget Lab broke down the effects of the tariffs, revealing the average effective US tariff rate after incorporating all 2025 tariffs is now 22.5 percent - the highest since 1909.
Advert
The tariffs imposed against countries such as Germany, Brazil and Colombia will likely result in a price-hike of everyday items including alcohol, coffee and cars, but the overall cost to the average household reported by the Budget Lab proves that the impact comes down to more than coffee.
According to the report, the reciprocal tariffs translate into a 2.3 percentage point increase to overall inflation - resulting in an extra cost of approximately $3,800 for the average household.
When it comes to the cost increase for houses at the 'bottom of the income distribution', the report estimates an increase of $1,700.
Bill Adams, chief economist at Comerica Bank, has spoken about how increased costs could result in inflation as companies pass along the costs to consumers.
Per The New York Post, he said: "If tariffs stay in effect as announced, foreign sellers will likely absorb some of the cost, as will American importers. But even so, the increase will likely cause a 3 percent to 5 percent cumulative incremental increase in consumer prices above the trend rate of inflation over the next year.”
However, Brandon Daniels, chief executive at artificial intelligence supply chain firm Exiger, said companies may take steps to prevent an increase to household costs.
He told The Post: “Historical precedents indicate that sectors with more diversified and flexible manufacturing options – like appliances, furniture, textiles, and machinery – have responded to similar cost pressures by reshoring or expanding domestic production."
Financial services firm JPMorgan warned on Thursday, the day after 'Liberation Day', that the US would likely be facing a recession if Trump sticks to the tariffs announced at the White House.