Model: 2025 tariffs would result in -$3,800 per household, GDP shrinks by 0.8% over decade

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The price level from all 2025 tariffs rises by 2.3% in the short-run, the equivalent of an average per household consumer loss of $3,800 in 2024$. Annual losses for households at the bottom of the income distribution are $1,700.

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US real GDP growth is -0.5pp lower in 2025 from the April 2nd announcement and -0.9pp lower from all 2025 tariffs. In the long-run, the US economy is persistently -0.4 and -0.6% smaller respectively, the equivalent of $100 billion and $180 billion annually in 2024$.

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The newly announced tariffs on April 2 will raise $1.8 trillion in revenue over the next decade and shrink US GDP by 0.5 percent. The April 2 escalation comes in addition to previously announced tariffs, which will raise $1.3 in revenue over the next decade and shrink US GDP by 0.3 percent. Altogether, Trump’s tariffs will raise nearly $3.2 trillion in revenue over the next decade and reduce US GDP by 0.8 percent.

The tariffs will reduce after-tax income by an average of 2.1 percent and amount to an average tax increase of more than $2,100 per US household in 2025.

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