Trump's tariffs could cost households $4,200 annually
Twenty percent tariffs on imported products may cost the average American household up to $4,200 a year, according to an analysis by Yale researchers. President Donald Trump believes these tariffs will boost domestic production in the USA.
Donald Trump announced on Wednesday, during "Liberation Day," "retaliatory tariffs" on the entire world: 10% on all imports and 25% on foreign cars. He then presented a list of countries and the tariff rates that will apply to them—for the European Union, it will be 20%.
The basic 10% tariffs on products from all countries will take effect on April 5, and additional tariffs on goods from specific countries will take effect on April 9.
Here are the retaliatory tariffs Donald Trump announced on Wednesday:
- China - 34%,
- EU - 20%,
- United Kingdom - 10%,
- Vietnam - 46%,
- Taiwan - 32%,
- Japan - 24%,
- India - 26%,
- South Korea - 25%,
- Thailand - 36%,
- Switzerland - 31%,
- Indonesia - 32%.
Even before President Trump disclosed the details, economists warned that the implementation of "reciprocal tariffs" on goods imported from almost all countries worldwide could lead to a recession and pass on higher import costs to consumers.
According to an analysis by the Yale Budget Lab, tariffs will affect lower-income households more significantly, with their budgets potentially decreasing by up to 5.5%, while in the wealthiest households, it may shrink by 1.9%. Food prices may rise by an average of 3.7%.
Economist Ernie Tedeschi from Yale emphasizes that although revenue may increase, economic growth this year might shrink by half. CNN reminds us that over 25% of Americans live "paycheck-to-paycheck."
The implementation of global tariffs by the USA could lead to a global collapse of international trade and a significant increase in product prices. The last scenario, assuming a worldwide trade war, would result in "the global economic toll of President Donald Trump's tariffs could result in a $1.4trn hit to welfare worldwide" according to reports.
"We have some very, very good news today. A lot of good things are happening for our country. This is Liberation Day. 2 April 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again," Donald Trump announced at the beginning of his Wednesday speech in front of the White House.
He confirmed that at midnight from Wednesday to Thursday, 25% tariffs on cars imported into the USA will take effect. He also announced a 10% base rate on all imported goods. He argued that other countries imposed tariffs on the USA and in this way "plundered" America. "For nations that treat us badly, we will calculate the combined rate of all their tariffs, non-monetary barriers and other forms of cheating, and because we are being very kind, we're a kind people, very kind," he declared. He added that since the United States "will charge them approximately half of what they are and have been charging us."
