Effective Tariff Rates and Revenues (Updated March 16, 2026)
Effective Tariff Rates and Revenues (Updated March 16, 2026)
The USITC recently released updated trade and tariff data. We estimate an effective tariff rate (ETR) of 10.3 percent through January 2026. We project that replacing the IEEPA tariffs with a new 10% global tariff rate lowers the ETR to 7.7 percent on a bias-corrected basis appropriate for short-term projections.
Key Points
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Through January 2026, the average effective tariff rate was 10.3 percent. New tariffs have raised $209 billion in revenue between January 2025 and January 2026 before accounting for income and payroll tax offsets.
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ETRs vary dramatically by trade partner and product. Among major trading partners, China faces the highest tariffs, with ETRs reaching 33.9 percent in January. The share of imports from Canada and Mexico claiming an exemption under USMCA surged to nearly 85 percent in January, producing ETRs less than 5 percent. Steel and aluminum products are the most heavily tariffed product category at 41.1 percent, followed by automotive vehicles at 14.9 percent.
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The recent replacement of IEEPA tariffs with a 10% global tariff rate reduces the ETR from 10.3 percent to 7.7 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 2025, the effective tariff rate was 2.3 percent. By January 2026, the effective tariff rate climbed to 10.3 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 10 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 10 percent global tariff under Section 122 would raise the average effective tariff rate to 7.7 percent. This short-term ETR value is bias corrected, which produces a smaller short-term value relative to the longer-term ETR value of 8.9 percent that we report in our tariff simulator.
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 10 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 33.9 percent in January 2026. By major product category, steel and aluminum products face the highest effective tariff rates at 41.1 percent, reflecting both existing Section 232 tariffs and later rate increases on June 4 from 25 percent to 50 percent.
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 $209 billion dollars in customs revenue between January 2025 and January 2026.1 If importers had not accelerated purchases or changed their purchasing patterns, tariff revenue would have further increased by $49.8 billion dollars over this period.
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 85 percent in aggregate by January 2026. This surge reflects importers aggressively leveraging USMCA rules of origin to secure duty-free status and avoid higher tariff rates.
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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Footnotes
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This estimate does not account for indirect effects on other revenue sources such as the income and payroll taxes. ↩