Amid mixed signals on President Trump’s final reciprocal tariff program, which is slated to take effect tomorrow, one campaign option has reemerged: 20% reciprocal tariffs on most imports to the US.
And if Trump goes forward with that plan, consumers can expect higher prices, at least in the short run, according to a new analysis by the Yale Budget Lab.
The Yale Budget Lab estimates that a 20% broad tariff would raise consumer prices by 2.1% in a scenario where no countries retaliate. Prices would rise even higher, by 2.6%, if countries respond with a full tit-for-tat retaliation, assuming no reaction from the Federal Reserve.
Overall, that translates to a loss of $3,400-$4,200 per household for the year. Food prices would nearly double the recent rate of grocery inflation, rising 3.7%, while computers, clothing, and crops all see double-digit percentage price increases.
Yale Budget Lab also real US gross domestic product (GDP) growth taking a 0.9% to 1% hit in 2025 under both scenarios.
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