Key Points

• As of April 2026, the average effective tariff rate stood at 7.0 percent, the lowest level since March 2025. The recent decline follows the Supreme Court’s February 20, 2026 declaration that the IEEPA tariffs were unconstitutional.
• Effective tariff rates vary dramatically by trade partner and product. Among major trading partners, China faces the highest effective tariff rate of 24 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 83.9 percent in April. Steel and aluminum products remain the most heavily tariffed product category at 40.9 percent, followed by automotive vehicles at 13.4 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 average effective tariff rate was 2.3 percent. As of April 2026, it stood at 7.0 percent, the lowest level since March 2025. The recent decline follows the Supreme Court’s February 20, 2026 declaration that the IEEPA tariffs were unconstitutional.

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. 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.

Among major trading partners, China faces the highest effective rate of 24 percent in April 2026. By major product category, steel and aluminum products face the highest effective tariff rates at 40.9 percent, reflecting both existing Section 232 tariffs and rate increases in June 2025, from 25 percent to 50 percent.

How Did Changes in Import Behavior Affect Customs Revenue?

We estimate that tariff rate changes have raised $253.9 billion dollars in customs revenue between January 2025 and April 2026 before accounting for any potential tariff refunds following the IEEPA ruling and indirect effects on other revenue sources such as income and payroll taxes. If importers had not accelerated purchases or changed their purchasing patterns, tariff revenue would have further increased by $56 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 since early 2025, standing at 83.9 percent in aggregate as of April 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

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