Tariffs Are a Tax. You're Paying It. He Calls It "the Greatest Thing Ever Invented."

← all posts

"Tariffs are the greatest thing ever invented," Trump declared. He's been saying it for years. Virtually every economist in the world disagrees. Not ideologically — mathematically. A tariff is a tax on imports. US businesses pay it. Then they pass it to you. The question was never whether it would cost Americans. The question was when. The answer is: now.

The Biggest Tax Hike Since 1993. Paid By You.

The Tax Foundation's March 2026 analysis is blunt: the Trump tariffs are the largest US tax increase as a percent of GDP since 1993 — and they amount to an average tax increase of $1,500 per American household in 2026 alone. The effective US tariff rate sat at 2.4% when Trump took office. By the end of 2025 it was 16.8%. At one point last spring, when tariffs on Chinese goods hit 145%, it was even higher. The Supreme Court struck down the IEEPA tariffs in February 2026, but the administration immediately launched new Section 301 investigations against 16 countries — including the EU, China, Japan, India, Mexico, and Canada — to re-impose them through different legal authority. The rate isn't coming down.

Why You Didn't Feel It as Much Last Year — and Why That's Over.

Here's what kept 2025 from being a full disaster: businesses built massive inventory stockpiles early in the year, buying ahead of tariff increases. They ate the cost rather than raise prices immediately, to stay competitive. That buffered you. But stockpiles run out. And businesses — from grocery chains to furniture makers to clothing brands — have started announcing price hikes entering 2026. Goldman Sachs estimated tariffs caused inflation to rise half a percentage point in 2025. Jerome Powell, the Fed chair, said Trump's tariffs were responsible for the entirety of inflation's climb above the 2% target. JPMorgan projects that grocery prices will be among the hardest hit, because grocers operate on thin margins and have the least room to absorb costs. Nearly 8 in 10 Americans — including nearly 70% of Republicans — say they're worried tariffs will raise prices on everyday goods.

The Economy Is Slowing. The Forecast Was Cut Nearly in Half.

The OECD — the Organization for Economic Co-operation and Development — projected that US GDP growth would slow from 2.8% in 2024 to just 1.5% in 2026. That's nearly half the previous pace, driven by what the OECD explicitly called "rising trade costs" from Trump's tariffs. Multiple economists and institutions have flagged recession risk. The US collected $187 billion more in tariff revenue in 2025 than in 2024 — a 200% increase. That money came almost entirely from US businesses and, increasingly, from you. Not from China. Not from Canada. From US importers and US consumers. Trump said other countries would pay. They did not pay. You paid.

He Said "Other Countries Will Pay." They Did Not Pay.

This is the central lie and it has never been true. When the US imposes a tariff on Chinese goods, a Chinese business doesn't write a check to the US Treasury. A US importer does — when they bring that product into the country. The importer then raises prices or cuts margins. Usually both. Canada and Mexico, where 25% tariffs were briefly imposed, didn't send the US money. US car manufacturers, US food importers, and US retailers paid for it and then passed what they could to customers. China did retaliate with their own tariffs on US exports, which hurt US farmers and manufacturers selling abroad. We paid twice: as consumers importing their goods, and as producers locked out of their markets.