Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
The Incidence of Tariffs: Rates and Reality
Journal of Economic Perspectives
(pp. 123–44)
(Complimentary)
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.Citation
Gopinath, Gita, and Brent Neiman. 2026. "The Incidence of Tariffs: Rates and Reality." Journal of Economic Perspectives 40 (3): 123–44. DOI: 10.1257/jep.20251486Additional Materials
JEL Classification
- E16 General Aggregative Models: Social Accounting Matrix
- E31 Price Level; Inflation; Deflation
- F13 Trade Policy; International Trade Organizations
- F14 Empirical Studies of Trade
- F31 Foreign Exchange
- K33 International Law