Three Charts on US Tariffs

Erica York – Tax Foundation

For those keeping track at home, the President has said he is using tariffs to offset the cost of a long list of programs, including but not limited to the One Big Beautiful Bill Act, aid to farmers hurt by tariffs, income tax elimination, and $2,000 dividend payments. And now, some are pushing for a temporary payroll tax cut. 

Tariffs do not, of course, provide an endless pot of money to pay for all those programs. In addition to watching that list grow, this week I’m paying attention to: 

• The Fed as it makes another difficult interest rate decision amid a soft labor market and above-target inflation. Key government data on jobs and prices are delayed or canceled, and last week’s ADP report shows private sector employment fell by 32,000 jobs in November. Expectations are that the Fed will cut again.
• The Monthly Treasury Statement for November, expected December 10. October’s statement clocked in nearly $33.1 billion of customs duties revenues, bringing the year’s total to $205 billion compared to $65 billion by the same point in 2024.  
• The September International Trade report coming out on December 11. August’s report showed goods imports fell 6 percent from July, a large drop that came alongside the “Liberation Day” tariff hikes. September’s report will show whether imports continued to weaken under those tariffs. 

In the meantime, these three charts show the impact tariffs are having on economic sentiment, prices, and import behavior.  

How many times can you say tariff? The Fed published its final Beige Book for 2025 at the end of November, and tariffs were a repeated issue for Fed contacts across the country. In all of 2024, the word “tariff” or “tariffs” only appeared a dozen times—with 11 of those 12 appearances coming after the 2024 elections. In 2025, tariff mentions increased by a whopping 4,792 percent to 587.   

Who’s paying for the tariffs? US importers mainly. September import price index data shows that US importers are continuing to pay most of the tariffs. The index shows prices before tariffs are applied. If foreign exporters were bearing a large portion of the tariff burden, we should expect to see a large decrease in the index. Instead, we’re seeing fairly stable import prices overall, or in the case of China, a slight decline, illustrating that the bulk of the tariff burden is falling on US importers. 

Do people respond to incentives? The tax base for the Canada and Mexico IEEPA tariffs is much smaller than 2024 import data would suggest. In that year, 38 percent of Canadian imports and 49 percent of Mexican imports came into the United States under the USMCA program. But in that year, for many products, there was little difference in tariffs provided under the USMCA, meaning the compliance cost of qualifying was not worth the potential tariff savings. But since the IEEPA tariffs kicked in, that differential has changed, and much larger shares of goods are being brought in under USMCA: in August, less than 15 percent of imports from both trading partners.

~~~~~~~

Some general information from U.S Bureau of Labor Statistics December 1, 2025

All Imports Excluding Fuel: Prices for nonfuel imports advanced 0.2 percent in September following a 0.1-percent increase in August. Higher prices in September for nonfuel industrial supplies and materials and consumer goods more than offset lower prices for capital goods and foods, feeds, and beverages.

Nonfuel import prices rose 0.8 percent on an over-the-year basis. Higher prices for nonfuel industrial supplies and materials and capital goods more than offset lower prices for automotive vehicles; foods, feeds, and beverages; and consumer goods for the 12-month period ended in September.