Key Points

• Through February 2026, the average effective tariff rate was 8.9 percent. New tariffs have raised $224.8 billion in revenue between January 2025 and February 2026 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 31.6 percent in February. The share of imports from Canada and Mexico claiming an exemption under USMCA surged to nearly 86.3 percent in February, producing ETRs less than 5 percent. Steel and aluminum products are the most heavily tariffed product category at 40.1 percent, followed by automotive vehicles at 13.5 percent.
• We estimate replacing the IEEPA tariffs with a 10% global tariff rate will lower the ETR to 8.1 percent.

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 February 2026, the effective tariff rate climbed to 8.9 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 replacing the IEEPA tariffs with a 10 percent global tariff under Section 122 will result in a short-term average effective tariff rate of 8.1 percent.

Among major trading partners, China faces the highest effective rate of 31.6 percent in February 2026. By major product category, steel and aluminum products face the highest effective tariff rates at 40.1 percent, reflecting both existing Section 232 tariffs and later rate increases on June 4 from 25 percent to 50 percent.

How Did Changes in Import Behavior Affect Customs Revenue?

We estimate that tariff rate changes have raised $224.8 billion dollars in customs revenue between January 2025 and February 2026.¹ If importers had not accelerated purchases or changed their purchasing patterns, tariff revenue would have further increased by $53.1 billion dollars over this period.

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 86.3 percent in aggregate by February 2026. This surge reflects importers aggressively leveraging USMCA rules of origin to secure duty-free status and avoid higher tariff rates.

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

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