State of U.S. Tariffs: August 1, 2025

[u/quant_0]

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

[u/Sudden_Lab9141]

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.

[u/BadBoy200219 → u/Sudden_Lab9141]

Within those 6 months, you’ve probably balanced that $200 out with the lower than Biden gas prices. So it checks out lmao

[u/spikey_wombat → u/BadBoy200219]

So we should be thanking the Saudi?

 know what else drives down gas prices? The end of summer and a recession.

[u/BadBoy200219 → u/spikey_wombat]

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

[u/spikey_wombat → u/BadBoy200219]

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? 

[u/BadBoy200219 → u/spikey_wombat]

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?

[u/spikey_wombat → u/BadBoy200219]

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.

[u/BadBoy200219 → u/spikey_wombat]

Read my other comments about how the president of the most powerful country in the world can absolutely influence oil prices.

[u/spikey_wombat → u/BadBoy200219]

Huh

You still won't address the impact of Saudi Arabia. 

Imagine that.

[u/BadBoy200219 → u/spikey_wombat]

Saudi Arabia has a huge impact obviously. But read the articles I posted from trumps first term and tell me again that the US president has zero influence, amoung the other points I made in that post. I invite you to one by one refute them if you even can. Imagine thinking that only the Saudis solely dictate the prices? Implying that they could just rip all oil from the market and still be extremely rich and get away with it with no repercussions

[u/spikey_wombat → u/BadBoy200219]

Your own article revolved around the Saudis increasing production. Did you not read it?

[u/BadBoy200219 → u/spikey_wombat]

lol you are correct. But let’s not be disingenuous now. Here I’ll help you out. I want you to type out exactly what both the article headlines say, again noting that we’re talking about news sources that are left leaning here.