Effective Tariff Rates and Revenues (Updated May 12, 2026)
Effective Tariff Rates and Revenues (Updated May 12, 2026)
The USITC recently released updated trade and tariff data. We estimate an effective tariff rate of 7.1 percent as of March 2026, the first full month after the IEEPA tariffs were replaced by a global 10 percent tariff implemented under Section 122.
Key Points
- As of March 2026, the average effective tariff rate stood at 7.1 percent, the lowest level since March 2025. The recent decline follows the Supreme Courtās February 20, 2026 declaration that the IEEPA tariffs were unconstitutional. New tariffs have raised $239.5 billion in revenue between January 2025 and March 2026 before accounting for income and payroll tax offsets and any potential tariff refunds following the IEEPA ruling.
- Effective tariff rates vary dramatically by trade partner and product. Among major trading partners, China faces the highest effective tariff rate of 25 percent, although this is a marked decline from previous months. The share of imports from Canada and Mexico claiming an exemption under USMCA stood at 84.9 percent in March. Steel and aluminum products remain the most heavily tariffed product category at 38.1 percent, followed by automotive vehicles at 13 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 administrationās tariff policies have resulted in substantial increases in effective tariff rates. In January 2025, the average effective tariff rate was 2.3 percent. As of March 2026, it stood at 7.1 percent, the lowest level since March 2025. The recent decline follows the Supreme Courtās February 20, 2026 declaration that the IEEPA tariffs were unconstitutional. New tariffs have raised $239.5 billion in revenue between January 2025 and March 2026 before accounting for income and payroll tax offsets and any potential tariff refunds following the IEEPA ruling.
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 āpre-substitutionā rates. The gap between these lines reveals the impact of behavioral responses as importers adjust their purchasing patterns in response to tariff changes. The drop in both series in March reflects the repeal of the IEEPA tariffs in late February and their replacement with a 10 percent global tariff under Section 122.
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. 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 25 percent in March 2026. By major product category, steel and aluminum products face the highest effective tariff rates at 38.1 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 $239.5 billion dollars in customs revenue between January 2025 and March 2026.1 If importers had not accelerated purchases or changed their purchasing patterns, tariff revenue would have further increased by $54.2 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 84.9 percent in aggregate by March 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 any potential tariff refunds following the IEEPA ruling, and does not account for indirect effects on other revenue sources such as income and payroll taxes. ā©