Donald Trump’s heavy tariffs could push around 1 million Americans into poverty: Report

CNN report, quoting The Budget Lab at Yale, stated that Donald Trump’s tariffs could push around 875,000 more Americans into poverty by 2026, including 375,000 children. The analysis used the Official Poverty Measure, which calculates poverty based on pre-tax income.

The research released Tuesday highlights the toll on low-income families, who spend a larger share of their earnings on everyday essentials like groceries and clothing. These households also tend to buy more imported goods, which were once cheaper but are now hit hardest by the tariffs.

John Ricco from The Budget Lab said, “Tariffs are a tax on American families,” adding, “Because tariffs are a tax on goods and services, instead of income, they hit harder on people who spend a higher percentage of income than they save.” The study predicts the overall poverty rate could rise to 10.7%, up from 10.4% without tariffs.

Trump’s recent tariffs are the highest in nearly a century, with the president still pushing for more, especially on countries buying Russian oil, worsening the situation amid the ongoing political and war crises. The average effective tariff rate in the US has jumped to 17.4%, the highest since 1935.

If this pace continues, it’s a massive leap from 2.5% at the start of the year. However, the legality of these tariffs remains uncertain. The Supreme Court has agreed to hear Trump’s argument after a lower court ruled he overstepped his emergency powers.

If the Court rules against him, most of the tariffs (around 71%) could be removed, though Trump still enjoys other powers to try and keep some in place.

According to the US Census Bureau’s estimate on Tuesday, nearly 36 million Americans lived in poverty last year. The poverty rate fell 0.4 percentage points to 10.6% as paychecks and earnings mostly kept up with living costs.

Using a broader gauge, the Supplemental Poverty Measure, which factors in food stamps, child care, and medical costs, shows the number of Americans in poverty could rise by 650,000, including 150,000 children, pushing the rate from 12% to 12.2%.

The Trump administration has defended the tariffs. White House spokesperson Taylor Rogers  in a statement to CNN said Trump’s economic policies during his first term helped working-class Americans and reduced income inequality.

Claiming that America is recovering from “Joe Biden’s economic disaster,” Rogers said the agenda of tax cuts, tariffs, deregulation, and energy dominance would continue.

(With inputs from CNN, The Budget Lab at Yale)

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