There is no question that the US administration that entered the White House on January 20 has made a host of dramatic changes in the financial, social, and even physical aspects of America (witness the demolition of the East Wing of the White House to build a grand ballroom to accommodate up to 1,000 guests at future state dinners).
Among the most dramatic changes is Trump’s overturning decades of US trade policy – building a wall of tariffs around what used to be a wide-open economy – which Trump emphasizes puts the US at an advantage.
His double-digit taxes on imports from almost every country, including the 15% tariff on goods imported from Israel, have disrupted global commerce and strained the budgets of consumers and businesses worldwide. They have also raised tens of billions of dollars for the US Treasury.
For the record, there were no such tariffs on Israeli imports to the US prior to 2025, as there was a US-Israel Free Trade Agreement in place since 1984. The unilateral imposition of a 15% tariff on goods imported from Israel instantly abrogated that agreement, which was the first ever between the US and a foreign country.
It is not yet clear what the advantage of the new tariffs is or whether they will or will not be beneficial in the long term. What is clear is that the tariffs have imposed a very real addition to the cost of imported goods and services, whether the White House likes to admit it or not. And this, by an administration that pledged, if elected, to bring down consumer prices on day one.
How much more will consumers actually have to pay for goods and services as a result of these tariffs?
In 2025, per data from the Yale Budget Lab, the effective US tariff rate peaked in April, far higher than the average seen at the start of this year. Before finalizing shifts in consumption, November’s effective tariff rate was nearly 17% – seven times greater than January’s average and the highest seen since 1935.
According to reports by the tracking firm Statista, the total value of tariffs collected in 2025 through November was $236 billion, much more than in years past, with one month of 2025 still to go. Of that amount, $215b. has been collected since April 2, when the new rates were announced.
For the record, again according to Statista, US customs duties had never exceeded roughly $100b.-$108b. in a fiscal year, making the current surge without modern precedent. For comparison purposes, US tariff revenue in fiscal year 2024 totaled about $77b., underscoring the dramatic increase in 2025 collections.
If this trend continues, the year will end with about $257b. in collected tariffs, an increase of roughly $180b. over last year.
To understand the resultant effect on the pocketbook of the average American, it is important to internalize that tariffs are paid by importers who then have to decide how much of the increase will be passed on to the end user.
The US population at the end of 2025 will hover around 325 million. That means that each man, woman, and child in America will spend an additional $554 annually as a result of the $180b. in increased tariffs. However, when this number is adjusted to account for purchasing power, the numbers change dramatically.
US Bureau of Labor Statistics data show that the top 20% of American income earners are now responsible for over half of all consumption. That means that about 64 million people will shoulder half the cost of the increase (i.e., $90b.), or about $1,401 for every man, woman, and child in this category. For a family of four, that’s an extra $5,604 a year in living expenses. For a family of four in the remaining population group of 260 million people, it would be an annual cost increase of $1,380.
These tariffs have hit nearly every country in the world. However, they have had the biggest impact on US trade with China, once the biggest source of American imports and now No. 3 behind Canada and Mexico. US tariffs on Chinese imports now come to 47.5%, according to calculations by Chad Bown of the Peterson Institute for International Economics.
Of course, the final words on the subject have not yet been written. What will happen if the Supreme Court finds that the tariffs were not legal and that the monies paid need to be refunded is anyone’s guess. But for the moment, the tariffs remain in place, the importers are obligated to pay them in order to release ordered goods from customs, and the consumer will feel the full brunt of the changes.
Mark McKinnon, the founder of the group No Labels, opined on the subject earlier this year, saying: “As history has repeatedly proven, one trade tariff begets another, then another – until you’ve got a full-blown trade war. No one ever wins, and consumers always get screwed.” Exactly!
The writer, an international business development consultant, is a former national president of the Association of Americans and Canadians in Israel, a past chairman of the board of the Pardes Institute of Jewish Studies, and a board member of the Israel-America Chamber of Commerce.