Experts Warn Trump Tariffs Will Lead to Highest Tax Increase for Americans in a Generation

Small Town Truth

Mar 52 min read

New U.S. tariffs on imports from Canada, Mexico, and China could increase household costs by over $1,200 annually, warns the Peterson Institute. President Trump’s 25% tariffs on Canadian and Mexican goods, along with a 10% levy on Canadian energy and Chinese imports, mark the largest tax hike on consumers in a generation. Experts predict rising prices, slower economic growth, and supply chain disruptions, with foreign retaliation expected to further impact U.S. businesses and exports.

American households could face an average annual cost increase of more than $1,200 due to newly imposed tariffs on goods from Canada, Mexico, and China, according to an analysis by the Peterson Institute for International Economics.

This shocking price tag comes after President Trump announced a new set of tariffs, including a 25% levy on most imports from Canada and Mexico and 10% levy on Chinese goods and Canadian energy.

Experts warn that these measures represent the largest tax increase on American consumers in at least a generation, with economic consequences expected to ripple across multiple industries.

The Peterson Institute warns that the new tariffs could lead to higher prices for consumers, slower economic growth, and major disruptions to supply chains. But that’s not all—foreign governments are already retaliating back. Canada announced tariffs on over $100 billion in U.S. goods, with plans to expand to $155 billion if the U.S. tariffs persist, while Mexico has pledged unspecified countermeasures to be detailed by March 9. These countermeasures are escalating tensions and raising concerns that American exporters will face even steeper costs and greater uncertainty in more global markets.

“Future waves of U.S. tariffs and retaliation will increase these substantial consumer costs alongside the other economic harms of tariffs: reduced economic growth, a shrinking export sector, and supply chain disruption,” the analysis states.

Previous trade disputes, including the 2018–2019 U.S.-China trade war, have shown that tariffs primarily result in higher prices for American consumers rather than price reductions from foreign exporters. While currency fluctuations can offset some of the impact, analysts note that these effects are often limited and come at the expense of U.S. exports.

With the new tariffs set to take effect, economists and industry leaders are closely watching how businesses and consumers will absorb the increased costs—and whether additional trade restrictions could follow in the months ahead.