Headline: The Budget Lab
Overall Price Level & Distributional Effects: The price level from all 2025 tariffs rises by 1.3% in the short-run, the equivalent of an average per household income loss of $1,800 in 2025$. 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 more than $1,000. The post-substitution price increase settles at 1.1%, a $1,500 loss per household.
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