U.S. importers pay tariffs to Customs and Border Protection, but consumers can still bear part of the cost when businesses pass it on through prices. How much reaches shoppers depends on the product, its country of origin, the tariff rules and exemptions that apply, and how suppliers and businesses respond. The latest cited Federal Reserve Bank of New York study found partial, delayed pass-through for the 2025 tariffs; it is not a forecast of the cost of every tariff now in effect.
Who actually pays a tariff?
The importer of record pays the duty to U.S. Customs and Border Protection when goods enter the country. That legal payment does not determine who ultimately bears the economic cost. An importer might absorb some of it in a lower margin, negotiate a lower price from a foreign supplier, or pass some of it on to customers. The mix can vary, and the available evidence does not support assuming that foreign suppliers always absorb the duty or that retailers always pass it on in full.
Tariffs can also affect goods made in the United States. U.S. manufacturers may pay more for imported components or materials, while domestic competitors may have more room to raise prices if imported alternatives become costlier. The Congressional Research Service explains these channels in its overview of tariffs and their effects.
What changed in U.S. tariff policy in 2026?
The tariff picture changed substantially during the year. The Congressional Budget Office’s August 20, 2026 update accounts for policy changes through July 31; it is a dated snapshot, not a guarantee that every listed rule remains unchanged after that date.
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| Date or period | Policy change | What it means for consumers |
|---|---|---|
| February 20, 2026 | The Supreme Court ruled that the Administration could not impose tariffs under the International Emergency Economic Powers Act (IEEPA) authority. The Administration ended those tariffs shortly afterward and began issuing refunds in May, according to CBO. | This ruling and the subsequent policy changes altered the tariff mix; it does not mean that all tariffs ended. |
| February 24–July 24, 2026 | A temporary 10% Section 122 surcharge applied to imports from all countries, subject to listed exceptions. The proclamation said it generally applied in addition to other duties, but not in addition to Section 232 tariffs on the same part of an import. It expired on July 24 under its stated schedule. | It should not be described as a current blanket duty after its scheduled expiry. |
| July 24, 2026 | USTR imposed Section 301 rates of 10% to 12.5% on imports from more than 80 countries, as reflected in CBO’s update. | The rates and exemptions depend on the policy schedule and the import; the headline range alone cannot determine the duty on a particular item. |
CBO’s update also accounted for other changes, including tariffs on Brazil and modifications involving steel, aluminum and copper. It did not include announced changes that were not yet in effect by July 31, including potential changes for some imports from Canada. A July 23 White House memorandum describes the Section 301 schedule as arising from an investigation into whether economies failed to prohibit or effectively enforce prohibitions on goods made with forced labor. It lists 10% rates for certain economies and generally 12.5% for other investigated economies, with exemptions and different treatment for certain most-favored-nation (MFN) rates. Product classification and origin matter, so consumers cannot infer an item’s duty from a country headline alone.
Why a tariff rate is not a checkout-price increase
CBO estimated the effective tariff rate at 10% in its August 2026 update, compared with 15% in its November 2025 estimate and 2% in 2024. Its February 2026 estimate would have been about 7% without IEEPA or Section 122 tariffs. These figures are import-weighted averages based on 2024 imports—not the rate on every product, a retail sales tax, or a forecast that prices will rise by the same percentage.
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The 2024 trade weights are important: CBO’s measure does not reflect how businesses and consumers changed their trade patterns in response to tariffs from 2025 onward. CBO also cautions that projections are uncertain because the United States has not implemented changes of this size in many decades, responses may differ from assumptions, and policy changes frequently. For an individual product, relevant details include its tariff classification, country of origin, applicable legal authority, exclusions or other treatment, and any duties that apply together.
How much of a tariff reaches consumer prices?
In a study published in August 2026 and revised in September, New York Fed economists Mary Amiti, Sebastian Heise and David E. Weinstein estimated that about 26% of the 2025 tariff increase passed through to consumer prices. They measured the change relative to less-exposed goods while holding aggregate conditions fixed. That estimate describes the tariffs and method studied; it is not a universal pass-through rate for every product or for the tariff mix in effect after July 2026.
The authors attributed 64% of the measured increase to direct effects and 36% to indirect effects. Direct effects come through prices of tariff-exposed goods. Indirect effects can take longer as tariffs raise the cost of imported inputs used by U.S. producers or affect domestic competitors. The researchers found that the direct effect arrives quickly, while the indirect supply-chain channel takes nine to twelve months. As they put it, “Tariffs raise the prices of goods made at home, not just the imports they tax—an effect that standard passthrough estimates largely miss.”
A historical example shows why effects need not stop at the taxed product. CRS describes U.S. laundry-equipment prices in 2018 rising by as much as 14% compared with the 2017 average after washing-machine tariff increases of up to 50%. A cited study estimated increases of $86 per washing machine and $92 per dryer; dryers were not subject to the same protection. The study attributed part of the spillover to retailers pricing washer-dryer pairs alike. These are historical findings, not estimates of 2026 prices.
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How much could tariffs cost a household?
A 2026 report by the minority staff of the Joint Economic Committee (JEC) estimated nearly $160 billion in consumer costs from February through November 2025, or nearly $1,200 per family on average. Elsewhere, the report put the amount above $1,700 by January 2026. It also gave a conditional projection of about $2,100 per family per year if monthly costs stayed as high as in November.
Those figures are JEC minority estimates, not an official bill assessed on each household. The report combined Treasury data on tariff collections with independent estimates of consumers’ share of the costs; its totals therefore depend on modeled consumer incidence. The annual figure is conditional, not a measured amount every family paid. These estimates do not isolate consumer costs under the complete policy mix that took effect after July 2026.
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The sources cited here do not provide a robust current dollar estimate for a typical household or a product-by-product estimate isolating tariffs in effect after July. Multiplying CBO’s aggregate effective rate by a household budget would not produce a defensible bill: the rate is a weighted average of imports, while a household’s exposure depends on what it buys and how costs move through supply chains.
How to assess a claim about tariffs and prices
Before comparing a headline rate, price estimate or household total, check what it actually measures:
- Policy and dates: Identify the legal authority and the dates the measure applied. A temporary surcharge that expired is different from a later tariff under a separate authority.
- Product and origin: Check the tariff classification and country of origin, plus any exclusions, quotas, offsets or other treatment that may change the duty.
- Price channel: Ask whether the claim concerns the directly taxed import, a U.S.-made product using imported inputs, or a domestic competitor’s price.
- Evidence and comparison: Distinguish observed prices from an empirical estimate, a model, or a conditional projection. Look for the period studied and the comparison group.
- Household arithmetic: Check whether a dollar figure is an average based on estimated consumer incidence or a direct charge. Do not treat either as a personalized household bill without evidence about that household’s purchases.
Different sources answer different questions: CBO’s policy update estimates an aggregate import-weighted rate; CRS explains tariff mechanics and summarizes evidence; the New York Fed study estimates consumer-price pass-through for the 2025 tariffs; and the JEC minority report presents modeled household-cost estimates. Keeping those scopes separate is essential when interpreting what a tariff headline could mean for a shopper.
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