Tariffs lift U.S. effective rate to 11%
- Yale’s Budget Lab said on April 2 the U.S. average effective tariff rate reached 11.0%, after new Section 122 and Section 232 duties took hold. - The same report estimated those tariffs would lift the price level 0.5% to 0.6% and cut average household purchasing power by $650 to $780. - By April 8, the rate was 11.8%, while Congressional Budget Office estimates still show tariffs adding 0.4 points to inflation. (budgetlab.yale.edu)
The U.S. average effective tariff rate hit 11.0% on April 2, according to Yale’s Budget Lab, the highest level since 1943 excluding the 2025 spike. (budgetlab.yale.edu) That figure measures the import-weighted tax actually applied across goods, not the headline rate on any single product. Budget Lab said the jump reflected the 10% Section 122 tariffs and Section 232 tariffs on steel, aluminum, copper, automobiles, auto parts, and other products. (budgetlab.yale.edu) Budget Lab estimated that if the Section 122 tariffs expire after 150 days as scheduled, the ultimate price-level effect would be 0.5% to 0.6%. It put the average household loss at about $650 to $780. (budgetlab.yale.edu) A week later, after newly announced pharmaceutical tariffs and changes to metal tariffs, Budget Lab raised its pre-substitution effective-rate estimate to 11.8%. It said the household loss would rise to about $760 to $940 if Section 122 still expires on schedule. (budgetlab.yale.edu) The inflation debate is partly about timing. Budget Lab’s April 1 tracker said most available economic data still reflected conditions before the Supreme Court vacated International Emergency Economic Powers Act tariffs on February 20, 2026. (budgetlab.yale.edu) Even so, that tracker found imported core goods and durable-goods prices had each risen 1.5% during 2025 through January, with implied pass-through to consumer prices ranging from 46% to 86% for core goods and 51% to 115% for durables. (budgetlab.yale.edu) Other estimates point in the same direction. A January 30, 2026 paper by Alberto Cavallo, Paola Llamas, and Franco M. Vazquez found retail tariff pass-through reached 24% and contributed about 0.76 percentage points to the Consumer Price Index by October 2025. (pricinglab.org) The Congressional Budget Office used a broader macro model and reached a smaller estimate. In a June 4, 2025 letter, it said tariff increases implemented through May 13, 2025 would raise inflation by an annual average of 0.4 percentage points in 2025 and 2026. (cbo.gov) Budget Lab also said the long-run tradeoff is uneven: U.S. manufacturing output rises, but construction and mining shrink more. In its April 8 update, it estimated the U.S. economy would be persistently 0.1% smaller, or about $30 billion a year in 2025 dollars. (budgetlab.yale.edu) The immediate number is 11%-plus. The harder question is how much of that tax importers keep absorbing, and how much shows up in store prices over the rest of 2026. (budgetlab.yale.edu) (pricinglab.org)
