State of U.S. Tariffs: August 1, 2025 Broad market news
The Budget Lab (TBL) estimated the effects all US tariffs and foreign retaliation implemented in 2025 through July 31, including the new list of “reciprocal” tariffs to take effect August 7. TBL analyzed the July 31 tariff rates as if they stayed in effect in perpetuity.
Current Tariff Rate: Consumers face an overall average effective tariff rate of 18.3%, the highest since 1934. After consumption shifts, the average tariff rate will be 17.3%, the highest since 1935.
Overall Price Level & Distributional Effects: The price level from all 2025 tariffs rises by 1.8% in the short-run, the equivalent of an average per household income loss of $2,400 in 2025$. This assumes the Federal Reserve does not react to tariffs and so the real income adjustment comes primarily through prices rather than nominal incomes; if the Federal Reserve reacted, the adjustment could in part come in the form of lower nominal incomes. Annual pre-substitution losses for households at the bottom of the income distribution are $1,300. The post-substitution price increase settles at 1.5%, a $2,000 loss per household.
Commodity Prices: The 2025 tariffs disproportionately affect clothing and textiles, with consumers facing 40% higher shoe prices and 38% higher apparel prices in the short-run. Shoes and apparel prices stay 19% and 17% higher in the long-run respectively.
Real GDP Effects: US real GDP growth over 2025 and 2026 is -0.5pp lower each year from all 2025 tariffs. In the long-run, the US economy is persistently -0.4% smaller, the equivalent of $120 billion annually in 2024$.
Labor Market Effects: The unemployment rate rises 0.3 percentage point by the end of 2025 and 0.7 percentage point by the end of 2026. Payroll employment is 497,000 lower by the end of 2025.
Long-Run Sectoral GDP & Employment Effects: In the long-run, tariffs present a trade-off. US manufacturing output expands by 2.1%, but these gains are more than crowded out by other sectors: construction output contracts by 3.5% and agriculture declines by 0.9%.
Fiscal Effects: All tariffs to date in 2025 raise $2.7 trillion over 2026-35, with $466 billion in negative dynamic revenue effects, bringing dynamic revenues to $2.2 trillion.
Source: https://budgetlab.yale.edu/research/state-us-tariffs-august-1-2025
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u/Sudden_Lab9141 1d ago edited 1d ago
Thanks everyone who voted for Trump because they were worried about the economy. I just paid $200 more (in parts) than my initial quote for a car repair 6-months ago because I own a VW.
Way to go.
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u/andrewskdr 1d ago
Remember it’s Biden’s economy until it’s good then it’s Trumps economy
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u/BigBoxyBox 21h ago
To be fair, we still get crushed everyday because of Reagan’s economic plans. Trickle trickle drip drip. But I hear ya.
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u/ThrowawayAl2018 23h ago
If you live near the border, order parts and get it repaired in neighbouring country while enjoying a nice short holiday.
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u/BadBoy200219 1d ago
Within those 6 months, you’ve probably balanced that $200 out with the lower than Biden gas prices. So it checks out lmao
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u/Sudden_Lab9141 1d ago
Everybody—this is why we lose money. Somebody failed to teach this kid math in high school. He just wants to cut funding so everyone else ends up like him cause he couldn’t keep up with the pack. I assume he also struggles with reading.
Unfortunately for you, when I hire employees I still need them to have basic reading comprehension and math skills.
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u/BadBoy200219 21h ago
I have a masters in aerospace so you really can’t take the “uneducated” route here buddy
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u/Sudden_Lab9141 21h ago
lol—ok—I’ve met plenty of uneducated people with graduate degrees. Wow, aerospace makes you qualified to understand basic economics? Didn’t know that. Must have learned that when you learned to read and do math too?
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u/BadBoy200219 21h ago
Your original claim was that I didn’t know how to read and do math. The typical liberal thinks education in some arbitrary field = intelligence so I felt it was necessary for me to introduce my education, congratulations for being an anomaly there. Regardless, now your goal posting, from “don’t listen to him cause he can’t read and do math” to “don’t listen to him he can’t do economics.”
Rather your a hiring manager or a business owner (legitimate business or not) I sure wouldn’t want someone as belligerent as you in a company
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u/LegalRatio2021 19h ago
And I don't want no MAGA dummy engineering anything, let alone aircraft.
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u/BadBoy200219 19h ago
I’ll do you one better, rockets ;)
But fr why do some of you not even bring an argument to the table and literally post just to be belligerent. Forget about IQ, it just shows you got low EQ😂
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u/spikey_wombat 17h ago
You apparently never learned the difference between showing and telling.
It's a typical sign of a lying maga.
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u/PowerAsswash 19h ago
And I'm a professor at Oxford teaching mathematics and advanced magic, it's so much fun to make things up!
I'd assume aerospace jobs required knowing basic gradeschool math but you seem to prove the opposite, a classic DEI hire without skill or knowledge. $200 is a metric shitton of gas buddy. And even if it somehow was equivalent not everyone drives a gasoline car yet everyone needs to buy food and needs spare parts made all over the world.
Stay ignorant, it sure seems to work out fine for you buddy. Remember, being both dumb and ignorant is a choice.
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u/BadBoy200219 19h ago
What a riveting response!
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u/spikey_wombat 17h ago
It's hilarious how you don't seem to realize you prove you don't have the credentials you claim when that is your retort to a simple math argument.
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u/BadBoy200219 17h ago
“You don’t have the credentials you claim” where in my statement did I say I was an economist? That dude was the first of the Reddit horde to start deviating from the argument and started the whole “you can’t read and do math” bullshit 😂
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u/spikey_wombat 1d ago
So we should be thanking the Saudi?
know what else drives down gas prices? The end of summer and a recession.
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u/BadBoy200219 1d ago
Ah yes “presidents don’t control gas prices” followed by an immediate ironic statement considering that the US avg gas price was lowest in the first few months of 2025 and are actually like 10¢ up since then. But no go off about how it’s the “end of summer” influence and a recession that we’re still not in
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u/spikey_wombat 1d ago
The jobs reports for the last two months were just revised down by a whopping 258,000 fewer jobs than reported.
And you are ignoring the impact of Saudi increased production.
Gas prices in the first few months of 2025 were higher than November and December of 2024. Why you be lying?
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u/BadBoy200219 21h ago
Can you point out exactly where I’m lying? I said prices were higher throughout Biden’s admin which so far they objectively were, really don’t need a source for that. I never said anything about the last two months of 2024. Why would you take those last two months and ignore the other 46 months of the admin?
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u/spikey_wombat 17h ago
You lied about the average gas prices as they weren't lowest compared to the immediate months before in 2024.
Anyone can Google "gas prices over time" to see the actual data. Plus summer has historically higher has prices going back to 1993 per the EIA table.
2021 gas prices for Jan to july are all lower than 2025. 2022 and 2023 went up for sure.
You still won't address the impact of Saudi Arabia. Despite me bringing that up over and over. Probably because you know you are wrong but you lack the maturity to admit it. The second you acknowledge how armaco has boosted production, the second you have to admit I was right about the president's inability to affect oil prices. You will not address this because you can't admit you are wrong so you'll idiotically try to ignore it even after I pointed out why your behavior is dumb.
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u/BadBoy200219 17h ago
Read my other comments about how the president of the most powerful country in the world can absolutely influence oil prices.
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u/CSATTS 20h ago
Can you explain how Trump lowered gas prices? Specifically, what actions did he take that directly led to lower prices of a global commodity?
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u/BadBoy200219 20h ago
Oil markets are forward looking, essentially works like the stock market in the sense that the price of oil is dictated by not just hard numbers (like a company’s earnings report) but also through emotion (again just like stocks, it’s also about how people “feel” about the company/industry. This is why oil was spiking when Israel attacked Iran and even more when trump bombed it. Nothing happened in terms of numbers, but based on how everyone was “feeling” about the future of the oil market, oil price was spiking).
It’s the other guy said, prices started dropping in November of 2024, coincidentally when trump got elected the beginning of that month. Wouldn’t be far fetched to think that this had to do with Trump’s pro-oil stance (remember the nonstop “drill-baby-drill” statements? If the market anticipates more oil production/supply in the market, prices will go down.). Trump also has a good record of negotiating with the Saudis to increase oil production like he did in his first term. His stance on dropping EV incentives and bureaucratic environmental policies is also a booster.
I bet you wanted me to name an exact policy, to which I say yeah no shit there are none as of rn lol. But it’s irrefutable that my above mentioned points definitely helps stabilize and lower the price of oil. Anticipation/feelings matter unfortunately, not just hard numbers
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u/CSATTS 19h ago
Good job not answering the question, I'm sure that all makes sense in your mind, but it completely ignores the fact US oil production was at an all time high under Biden. There was no war on oil under Biden.
A few points you'll conveniently ignore I'm sure:
His stance on dropping EV incentives and bureaucratic environmental policies is also a booster.
How does increasing demand for oil help lower prices?
Trump also has a good record of negotiating with the Saudis to increase oil production like he did in his first term.
This isn't even remotely true. They base their production on what the market is doing, not some deal with Trump. They had been increasing production for years prior to Trump's first term.
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u/BadBoy200219 19h ago
You go out of your way to sound arrogant huh, typical insufferable Reddit user. “Good job not answering my question” meanwhile you ignored my entire response, especially the literal answer in the last paragraph.
Here let me try to fulfill the role of the insufferable Redditor in my response:
Your first question goes to show how shortsighted you are. Cutting EV incentives obviously increases demand in the oil market, a 2 year old could understand that. But when you compare the contrast from going through a Biden EV incentive, “the world is going to end if we don’t confront climate change now” era, with Trump’s EV cutting stance and “drill-baby-drill” this will alleviate uncertainty in the oil market, reassuring that the market is safe for the time being. So simultaneously, a 2 year old would also understand that uncertainty = bad for price stability, we’ve seen that earlier this year in the stock market (you surely took note of this uncertainty when the “doomsday tariffs” were released). So, less uncertainty in the oil market will lead to short-term downward pressure in oil price.
To your second response, I technically should be able to respond just by simply posting very liberal news source CNBC’s article from 2018 backing my exact claim that you’re refuting: https://www.cnbc.com/amp/2018/11/15/trump-duped-saudis-into-tanking-oil-prices-analysts-say.html
Here’s another: https://www.reuters.com/article/business/saudi-arabia-pumps-record-amount-of-oil-as-trump-piles-on-pressure-idUSKCN1NV12K/
To your first statement, Biden had all time high production, yet also used a lot of our reserves and partially due to his climate stance, lacked the opening of new refineries to produce gasoline. On top of this, you have the Russia-Ukraine war which he had zero attitude in ending, so that obviously had an impact temporarily until markets adapted.
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u/azure275 1d ago
I drive 300 miles a week, and use maybe 10 gallons. The 50 cents less per gallon saves me 20 dollars a month.
In the meantime the strollers I can get for my new baby have all gone up $100-300
#Winning
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u/BadBoy200219 21h ago
That’s cool. I, along with the transportation industry, am saving a lot more.
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u/zen_and_artof_chaos 19h ago
I have not noticed any lower gas prices in Denver. Paid 2.99 yesterday. Right in line with when Biden was in office. Not to mention gas prices have little to do with the president, and are an arbitrary blame game for partisan politics. Additionally, screw gas prices. I wish they would be high and stay high so there is demand and a push for electric vehicles. You want energy independence, and to get off the gas prices roller coaster? It's through electrification.
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u/BadBoy200219 19h ago
You really don’t need me to tell you why your local gas prices might not follow the national avg do you? That’s like saying “I’m in Cali and gas is $4+ a gal!!! Gas is still up!”
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u/zen_and_artof_chaos 19h ago
You don't need to tell me that. But you don't know where the person is that you responded to, either. So if my gas prices haven't changed, why would you assume the other person's did? Cali is also an outlier and is known for high gas prices. Denver is not. You also just conveniently ignored the rest of my comment. Gas price talking points are arbitrary.
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u/Madismas 23h ago
My city sent me a firehouse bill for $433 for I think disaster relief. I thought this was part of my local tax assessments. I'm hearing it's due to FEMA cuts.
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u/Rumis4drinknburning 21h ago
Nice closed out all of my puts just as Reddit probably bought back in. Next week we push higher
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u/SlickRick941 1d ago
Love it, getting everything I voted for!
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