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Yale models household and Treasury effects of Trump's 10% China tariff

Reporting and findings

  1. estimate

    The Budget Lab modeled Trump's 10% tariff on Chinese imports as a 0.14% short-run price increase and an average $223 annual loss of household purchasing power, with a disproportionate income-share burden on lower-income households; importers legally pay the tariff into federal customs revenue, and the model separately estimated about $400 billion in conventional federal revenue over ten years before dynamic effects, with no personal recipient or beneficiary inferred.

Summary and current status

The modeled payer is U.S. households and importers; projected federal revenue is not a realized benefit to Xi or Trump.

Modeled estimate, not observed loss

People and organizations

Relationships in this file

  1. Donald J. Trumpcounterpart whose country's imports Trump tariffedXi Jinping

Money trail

  1. revenueModeled ten-year conventional federal revenueabout $400 billion nominal USD
    Projected revenue source
    U.S. importers
    Projected revenue recipient
    United States Treasury
    Financially affected
    U.S. households and firms
    projected · 2025-02-05 · projected · central scenarioRead source record
    Calculation detailsPopulation U.S. federal customs revenue paid by importers; no personal recipient or beneficiary is inferredPeriod 2025-02-05 to 2035-02-05Projection horizon 2035-02-05Basis Budget Lab conventional ten-year estimate: U.S. importers are the legal payers, federal customs revenue is the public recipient, and households and firms may bear economic incidence through prices and trade responses; no personal beneficiary is identified.Limits The source says revenue is lower after accounting for the modeled GDP reduction; policy changes and trade responses can materially alter collections.
  2. lossModeled average annual household loss$223 2024 USD per household per year
    Loss or cost borne by
    U.S. households
    projected · 2025-02-05 · projected · central scenarioRead source record
    Calculation detailsPopulation Average U.S. household; modeled payer through higher prices and reduced disposable income from the 10% China tariffPeriod 2025-02-05 to 2026-02-05Projection horizon 2026-02-05Basis Budget Lab short-run tariff-incidence model: importers remit the tariff into federal customs revenue, while higher prices transmit the modeled loss to U.S. households; assumes announced Chinese retaliation and no Federal Reserve price offset and identifies no personal beneficiary.Limits Modeled central estimate, not an observed household bill; pass-through, substitution, retaliation, and monetary-policy responses can change the result.