WASHINGTON — President Donald Trump’s 2025 tariff push delivered a large customs-revenue windfall while leaving the short-run effect on the broader U.S. economy relatively modest, according to a new Brookings paper. The study found that most of the immediate burden landed on U.S. importers through higher tariff-inclusive prices, even as the policy sharply cut China’s share of U.S. imports and swelled federal receipts, March 26, 2026.
That result helps explain the political appeal and economic ambiguity of Trump’s trade strategy: Washington booked more cash, but the businesses writing import checks absorbed most of the near-term pain. The paper’s authors said the tariffs were most successful as a revenue tool and as a way to further decouple U.S. trade from China, while bigger promises around the trade deficit, reshoring and manufacturing jobs remain less certain.
Trump tariffs raised Washington’s take quickly
Brookings estimated the government collected $264 billion in customs revenue in calendar 2025, lifting tariffs to about 4.9% of federal receipts, up from roughly 1.6% over the prior decade. In separate official data, Treasury’s fiscal 2025 receipt summary showed customs duties at $194.9 billion, up 153% from fiscal 2024, underscoring how quickly tariff collections turned into one of Washington’s more important revenue streams.
Even so, the Brookings paper said the policy’s short-run net welfare effect was small, landing in a narrow range between a 0.10% gain and a 0.13% loss, measured against GDP. One reason is scale: imports accounted for 10.8% of GDP in 2024, and by December 2025 about 57% of U.S. imports were still entering duty-free.
Why Trump tariffs hit importers first
The clearest near-term loser was the U.S. buyer at the border. New York Fed economists found nearly 90% of the 2025 tariffs’ economic burden fell on U.S. firms and consumers, with importers still absorbing 86% of the hit as late as November. That matters because tariffs are collected from the importer of record, not from the foreign government or exporter Trump has long argued will pay.
The price evidence points the same way. A March update from the Yale Budget Lab said imported consumer-goods prices moved higher through late 2025 while aggregate labor-market effects remained hard to detect, suggesting the policy functioned more clearly as a tax-and-price shock than as a broad engine for immediate factory hiring or faster growth.
Trump tariffs look more like an escalation than a break from 2018
That pattern is not new. In a 2019 New York Fed post, researchers said Chinese exporters were not cutting prices enough to shield U.S. buyers, leaving American wholesalers, retailers, manufacturers and consumers to pay the tax. A 2023 USITC review reached a similar conclusion on the earlier Section 232 and 301 rounds, finding importers bore nearly the full cost even as tariffs reduced imports and lifted production in some protected sectors.
What changed in 2025 was the scale. Brookings said average U.S. tariff duties rose to 9.6% from 2.4%, the highest protection level in roughly 80 years, while China’s share of U.S. imports fell to just 7% in December 2025 from 23% in December 2017. By the paper’s accounting, the tariffs worked fastest as a tax collector and as a mechanism for redirecting trade away from China.
What comes next for Trump tariffs
The revenue story, however, is no longer static. The Penn Wharton Budget Model estimated that tariffs raised $209 billion in customs revenue between January 2025 and January 2026 before accounting for income and payroll tax offsets, but it also said the replacement of struck-down IEEPA tariffs with a new 10% global tariff would lower the effective tariff rate from 10.3% to 7.7% in the short run. Yale has also warned that some previously collected IEEPA-based revenue could still be returned to importers.
The bottom line is that Trump’s tariffs have so far worked fastest as a revenue machine and a China-diversion tool, not as a clear short-run growth strategy. Washington booked the windfall, but U.S. importers wrote most of the checks, and the longer-run promises around reshoring, trade deficits and durable job gains are still waiting for harder proof.
