Trump Tariffs Expected to Raise US Poverty by Nearly 1 Million

New research from The Budget Lab at Yale University reveals that President Donald Trump’s 2025 tariff hikes are expected to increase the number of Americans living in poverty by between 650,000 and 875,000 in 2026, including 150,000 to 375,000 children. These tariffs act as indirect taxes that raise prices and reduce the purchasing power of households, disproportionately affecting low-income families who spend a larger share of their income on basic goods and are more likely to purchase imported products subject to tariffs. The average effective tariff rate has reached its highest level since the 1930s, leading to an estimated increase in prices and income losses for households, with lower-income families losing at least $1,300 annually. Inflation data shows food prices and other household essentials have surged, further squeezing middle-class budgets and contributing to economic stress. Experts emphasize that these tariff-driven price increases push more families below the poverty threshold, with poverty rates projected to rise from 10.4% to 10.7%, according to the Official Poverty Measure. Meanwhile, President Trump has publicly downplayed inflation concerns despite these findings and rising consumer costs.