U.S. foreign trade policy: Effects of tariff increases on prices and output in the global economy

In April 2025, the United States abruptly announced exceptionally high tariffs on imports from more than 180 countries (levels not seen in nearly 150 years) shocking the global economy. Within a week, most measures were postponed for 90 days (until July 9, 2025), but tariffs on Chinese goods were retained and, immediately prior to implementation, were raised to as high as 145%. China responded by increasing tariffs on U.S. goods to 125%. U.S. equity markets fell by about 10% in the week following the announcement but nearly recovered in May amid speculation that the measures might be withdrawn. By August 2025, headline U.S–China tariff rates converged to roughly 55% and 33%, respectively. Notably, neither country raised duties on Russian imports. Existing assessments (e.g., Yale Budget Lab) focus primarily on the United States. We extend the analysis to Russia and to as many large economies as global input–output tables allow. Using both aggregate and highly disaggregated inter-industry and cross-country linkages within a Leontief framework, we obtain U.S. effects comparable to prior estimates, while the estimated impact on Russian prices and output is negligible. Because substitution and trade rerouting are excluded from the baseline, our results should be interpreted as conservative, lower-bound estimates.