Effective Tariff Rates and Revenues (Updated February 23, 2026)

Effective Tariff Rates and Revenues (Updated February 23, 2026)

International Tariffs Tax Policy

Effective Tariff Rates and Revenues (Updated February 23, 2026)

PWBM ¡ ¡ 23 min read
Effective Tariff Rates and Revenues (Updated February 23, 2026)

The USITC recently released updated trade and tariff data . We estimate an effective tariff rate (ETR) of 9.8 percent through December 2025. We project that replacing the IEEPA with a new 15% global tariff rate has only a small impact on the ETR, lowering it to 9.1 percent, on a consistent concept basis.


Key Points

  • Through December, 2025, the average effective tariff rate was 9.8 percent. New tariffs have raised $189.4 billion in revenue between January 2025 and December 2025 before accounting for income and payroll tax offsets.

  • ETRs vary dramatically by trade partner and product. Among major trading partners, China faces the highest tariffs, with ETRs reaching 33.4 percent in December, 2025. The share of imports from Canada and Mexico claiming an exemption under USMCA surged to nearly 88.2 percent in December, producing ETRs less than 5 percent. Steel and aluminum products are the most heavily tariffed product category at 39.6 percent, followed by automotive vehicles at 14.5 percent.

  • The recent replacement of IEEPA tariffs with a 15% global tariff rate only slightly lowers the ETR from 9.8 percent to 9.1 percent.


For forward-looking analysis, including long-term revenue and effective tariff rate projections, see our tariff simulator. For real-time data on daily tariff revenue collections, see our Real-Time Federal Budget Tracker.
How Have Effective Tariff Rates Changed Over Time?

The Trump administration’s tariff policies have resulted in substantial increases in effective tariff rates. In January, the effective tariff rate was 2.3 percent. By December, the effective tariff rate climbed to 9.8 percent.

Figure 1 shows the evolution of aggregate effective tariff rates since February 2025. The chart compares the observed average effective tariff rate in customs data with a counterfactual that assumes imports would have followed historical trends, which we refer to as the “pre-substitution” rates. The gap between these lines reveals the impact of behavioral responses as importers adjust their purchasing patterns in response to tariff changes.

We also provide projections of the short-term average pre-substitution and average effective rates taking into account the recent removal of the IEEPA tariff regime and the newly announced 15 percent global tariff under Section 122. We estimate that removing the IEEPA tariffs would reduce the average effective tariff rate to 4.4 percent, while implementing the 15 percent global tariff under Section 122 would raise the average effective tariff rate to 9.1 percent.

Figure 1: Aggregate Tariff Rates

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Figure 1

Note: The average effective tariff rate reflects the average rate observed in customs data, which is computed as the value of customs duties as a percentage of the value of imports. Pre-substitution rates are computed with observed effective tariff rates at the source country-product category level assuming the value of imports had followed historical trends. The dashed lines contain forecasts of the short-term effective tariff rate from PWBM’s tariff model assuming the removal of IEEPA and the imposition of a 15 percent global tariff under Section 122. For longer-term projections, see our tariff simulator.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

Among major trading partners, China faces the highest effective rate of 33.4 percent in December 2025. By major product category, steel and aluminum products face the highest effective tariff rates at 39.6 percent, reflecting both existing Section 232 tariffs and later rate increases on June 4 from 25 percent to 50 percent.

Figure 2: Effective Tariff Rates on Key Trading Partners and Product Categories

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by Major Trading Partner

by Selected Product Category

Note: The effective tariff rate is computed as the value of customs duties as a percentage of the value of imports. These rates are analogous to the post-substitution and pre-substitution rates shown in Figure 1.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

How Did Changes in Import Behavior Affect Customs Revenue?

We estimate that tariff rate changes have raised $189.4 billion dollars in customs revenue between January 2025 and December 2025.1 If importers had not accelerated purchases or changed their purchasing patterns, tariff revenue would have further increased by $45.7 billion dollars over this period.

Figure 3: Decomposition of Tariff Revenue Changes

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Notes: The mechanical revenue effect (in red) is the increase in tariff revenue that would have been collected if importers had not accelerated purchases or changed their purchasing patterns. The behavioral revenue effect (in blue) is the decrease in tariff revenue that was not collected due to changes in import behavior. The overall increase in tariff revenue (in black) is the sum of the mechanical and behavioral revenue effects.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

How Have North American Partners Responded to Tariff Hikes?

Tariff hikes in 2025 have driven a surge in the share of Canadian and Mexican imports that claim exemption from tariffs under the United States-Mexico-Canada Agreement (USMCA). Figure 4 shows that the share of imports from Canada and Mexico claiming an exemption under USMCA remained stable through late 2024. This share has sharply increased for both countries in recent months, reaching 88.2 percent in aggregate by December 2025. This surge reflects importers aggressively leveraging USMCA rules of origin to secure duty-free status and avoid higher tariff rates.

Figure 4: Monthly Share of Import Value Claiming Tariff Exemption Under USMCA

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Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.



For more detailed analysis of import behavior and tariff avoidance effects, see our comprehensive report on Import Surges and Tariff Avoidance. Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb

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  1. This estimate does not account for indirect effects on other revenue sources such as the income and payroll taxes.  ↩