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The Incidence of Tariffs: Rates and Reality

Author

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  • Gita Gopinath
  • Brent Neiman

Abstract

In 2025, statutory tariff rates on US imports rose to levels not seen in over one hundred years. What were the implications for prices? On the one hand, shipping lags, exemptions, and enforcement gaps kept the actual implemented rates at only half of the statutory rates, moderating the tariffs' impact. On the other hand, tariff pass-through to US import prices reached 92 percent, so the United States bore a large share of the costs. We study the incidence of the 2018–2019 and 2025 US tariffs and discuss implications for US sourcing, domestic manufacturing costs, and the dollar.

Suggested Citation

  • Gita Gopinath & Brent Neiman, 2026. "The Incidence of Tariffs: Rates and Reality," Journal of Economic Perspectives, American Economic Association, vol. 40(3), pages 123-144, Summer.
    • Handle: RePEc:aea:jecper:v:40:y:2026:i:3:p:123-44
    DOI: 10.1257/jep.20251486
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    More about this item

    JEL classification:

    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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