Brookings analysis shows trade policy increased federal receipts and shifted supply chains while producing limited short-term economic effects.
By yourNEWS Media Newsroom
A newly released academic analysis has found that tariff policies implemented under President Donald Trump generated significant federal revenue and reduced reliance on Chinese imports, while having only a modest overall impact on U.S. economic output.
The findings come from a Brookings Institution paper published March 25, which examined the short-term effects of tariffs introduced in 2025, including a broad set of reciprocal duties announced by Trump earlier that year.
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When unveiling the tariff policy, Trump stated, “For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike,” as part of his justification for imposing a 10 percent baseline tariff on most imports alongside higher country-specific rates.
According to the study, the overall effect of the tariffs on U.S. gross domestic product ranged from a slight increase of 0.1 percent to a decrease of 0.13 percent, depending on how trade flows and prices adjusted. Researchers concluded that, in aggregate, the policy neither significantly accelerated nor substantially hindered economic growth in the short term.
The most pronounced effects were seen in federal revenue and trade patterns. Tariff collections rose sharply in 2025, accounting for approximately 4 to 5 percent of total federal receipts, compared to an average of about 1.6 percent over the prior decade.
At the same time, China’s share of U.S. imports declined significantly, falling to roughly 7 percent by the end of 2025 from about 23 percent in 2017, before earlier tariff measures were enacted.
However, the reduction in Chinese imports did not result in a large-scale return of manufacturing activity to the United States. Instead, the study found that trade flows were largely redirected to other countries, particularly across Asia.
Researchers reported limited evidence that tariffs had increased domestic manufacturing employment, reduced the U.S. trade deficit, or led to significant relocation of supply chains to allied nations.
“It remains to be seen whether the tariffs will reduce the trade deficit, lower prices set by foreign exporters, promote manufacturing jobs, increase ‘friend-shoring’ among aligned countries, or reshore key sectors,” the authors wrote. “Evidence from 2018-19 and 2025 indicators suggests a narrow path towards achieving these goals.”
Despite tariff rates reaching some of the highest levels in decades, the study identified several factors that constrained their broader economic impact. A majority of imports—about 57 percent—continued to enter the United States duty-free, limiting the scope of tariff exposure.
In addition, statutory tariff levels were often lower in practice when applied at the border, and most U.S. exports did not face widespread retaliatory tariffs, with China being a notable exception.
The analysis found that higher import costs were largely passed on to domestic consumers and businesses. Researchers estimated that between 80 percent and 100 percent of tariff costs were reflected in higher prices, with a baseline estimate of approximately 90 percent.
While these higher prices imposed costs, the study found that they were offset to some extent by increased government revenue and wage gains in industries shielded by tariffs.
Separate Federal Reserve data cited in the analysis indicated that some companies have absorbed portions of the added costs in the short term, though economists expect more of those costs to be passed on over time.
The study was released as legal and policy debates continue over the future of U.S. tariff authority. In a Feb. 20 decision, the Supreme Court struck down a significant portion of the tariff program enacted under emergency powers, ruling that the administration lacked authority under the International Emergency Economic Powers Act to impose sweeping duties.
That ruling was followed by a lower court decision indicating that importers may be eligible for refunds on certain tariffs collected under the invalidated measures.
Trump has criticized the court decisions but indicated that he intends to continue pursuing tariff policies through alternative legal avenues.
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