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lite.cnn.com - on gopher - inofficial
ARTICLE VIEW:
Trump’s tariffs could push nearly 1 million Americans into poverty,
report finds
By Matt Egan, CNN
Updated:
2:02 PM EDT, Wed September 10, 2025
Source: CNN
President Donald Trump’s sweeping tariff regime is already reshaping
global trade and spiking government customs revenue. But these historic
import taxes could also push more Americans into poverty, according to
new research.
An published by The Budget Lab at Yale on Tuesday finds Trump’s
tariff hikes will likely increase the number of Americans living in
poverty by 875,000 in 2026. This increase includes an additional
375,000 children in poverty.
The figures are based on the , a long-standing poverty metric based on
pre-tax income.
Tariffs and related tend to hit low-income families the hardest. Less
affluent households typically spend a bigger chunk of their paychecks
than high-income families on living expenses, meaning they’re more
vulnerable to shifts in prices.
Not only that, but economists say lower-income households often buy
more imported products — which are most exposed to tariff-driven
price hikes — than higher-income households.
“Tariffs are a tax on American families,” John Ricco, associate
director of policy analysis at The Budget Lab, told CNN. “Because
tariffs are a tax on goods and services, instead of income, they hit
harder on people who spend a higher percentage of income than they
save.”
The Budget Lab also estimates the poverty rate would increase to 10.7%
after accounting for Trump’s tariffs, up from 10.4% without tariffs.
Living paycheck to paycheck
There were nearly 36 million people living in poverty as of the end of
last year, the US Census Bureau reported Tuesday. The poverty rate
dipped 0.4 percentage points to 10.6% as paychecks and earnings
largely kept up with the cost of living, the Census Bureau found.
The Budget Lab found that poverty would also rise when it analyzed , a
more comprehensive gauge that factors in government programs like food
stamps as well as child care, medical and other expenses.
Trump’s tariffs will likely increase the number of Americans living
in poverty by 650,000 in 2026 under the supplemental poverty measure,
according to the analysis. That includes 150,000 children. The poverty
rate would rise from 12% to 12.2%.
The findings underscore the consequences of tariff-driven price
increases, especially for Americans who are already living paycheck to
paycheck. Higher prices risk eroding consumers’ purchasing power, and
for those living paycheck to paycheck this can be quite painful.
In a statement to CNN, White House spokesperson Taylor Rogers argued
that the economic agenda during Trump’s first term helped
“working-class households prosper while narrowing income
inequality.”
“As that same America First agenda of tax cuts, tariffs,
unprecedented investments, deregulation, and energy dominance continue
to take effect during President Trump’s second term, Americans can
trust that Joe Biden’s economic disaster is coming to a close,”
Rogers said.
‘Not as weak as it appears’
The White House spokesperson also pointed to the report released
Wednesday as evidence that “inflation has cooled and tariffs have not
hiked prices like the so-called experts have predicted.”
Producer prices unexpectedly fell by 0.1% between July and August,
allowing the annual inflation rate to ease to 2.6%.
However, the drop was driven by a decline in trade services, a category
that reflects retailer and wholesaler profit margins. The drop in
profit margins suggests businesses are absorbing higher costs driven by
tariffs in their bottom lines.
Of course, weaker profits could cause some businesses to pass those
costs along to consumers in the form of higher prices, or make cutbacks
elsewhere such as by hiring less or laying off workers.
Economists at Barclays cautioned that August wholesale inflation was
“not as weak as it appears” and noted that outside of trade
margins, “inflation was reasonably firm.”
Highest tariffs in nearly a century
The tariff hikes under Trump have been historic.
Based on the tariffs imposed by Trump this year, the average effective
tariff rate in the United States has spiked to 17.4% — the ,
according to The Budget Lab.
If the current tariffs imposed by Trump are maintained, the average
effective tariff rate would climb to 17.4%.
Of course, trade policy has been changing rapidly throughout the year.
And at the same time, the bulk of Trump’s tariffs are currently in
legal limbo.
The Supreme Court on Tuesday over Trump’s global tariffs. The
administration is hoping justices will overturn a lower court ruling
that struck down the country-specific tariffs, finding the president
unlawfully leaned on emergency powers.
If the Supreme Court declares the tariffs illegal, it would erase the
vast majority (71%) of the 2025 tariffs imposed, The Budget Lab found.
But analysts and Trump officials have noted that the president has
other powers he could lean on to try to keep many tariffs in place.
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