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State of U.S. Tariffs: July 14, 2025 [1]
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Date: 2025-07
Average effective tariff rate
The distinction between pre-substitution metrics (before consumers and businesses shift purchases in response to the tariffs) and post-substitution (after they shift) is a crucial one. One metric where the difference is meaningful is the average effective tariff rate.
Measured pre-substitution—assuming there are no shifts in the import shares of different countries—the 2025 tariffs to date (including the ones effective August 1) are the equivalent of a 18.2 percentage point increase in the US average effective tariff rate. That calculation assumes that, for example, the share of imports from China remains at 14%, where it was in 2024. This is the right way to think about the tariffs from the perspective of consumer welfare, since it reflects the full cost faced by consumers before they start making difficult spending choices. This increase would bring the overall US average effective tariff rate to 20.6%, the highest since 1910.
Post-substitution—after imports shift in response to the tariffs—the 2025 tariffs are a 17.3 percentage point increase in the US average effective tariff rate, which brings the overall US effective tariff rate to 19.7%, the highest since 1933.
The timing of the transition from “pre” to “post” substitution is highly uncertain. Some shifts are likely to happen quickly—within days or weeks—while others may take longer.2
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[1] Url:
https://budgetlab.yale.edu/research/state-us-tariffs-july-14-2025
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