Congressional Democrats say Trump tariffs will cost U.S. households more than $2,500 this year

President Trump is working to replace revenue the federal government lost when the Supreme Court struck down his largest and boldest tariffs last month.

If the effort succeeds, congressional Democrats warn in a study released Friday, import taxes imposed by the administration will cost American households an average of $2,512 in 2026, an increase of 44% from last year’s $1,745 in tariffs. And this at a time when American consumers are already unhappy with the high cost of living and the war with Iran is driving up energy prices.

“Despite a Supreme Court ruling that much of Trump’s tariff program is illegal, the Trump administration refuses to provide relief to families,” said Sen. Maggie Hassan of New Hampshire, the top Democrat on the Joint Economic Committee. “As American families continue to face high costs, the President continues to choose to introduce new tariffs that will drive prices even higher. »

Calling the study “false,” White House spokesman Kush Desai said “President Trump will continue to use tariffs to renegotiate broken trade deals, lower drug prices, and secure billions in investments for the American people.”

Last year, Trump invoked the International Emergency Economic Powers Act of 1977 (IEEPA) to impose double-digit tariffs on almost every country on the planet.

But the Supreme Court ruled on February 20 that the law does not give the president the power to raise tariffs. The government must now reimburse importers who paid IEEPA tariffs, now declared illegal, which are expected to amount to around $175 billion.

The administration moved quickly to impose new tariffs, and Treasury Secretary Scott Bessent said the new levies “will result in virtually unchanged tariff revenues in 2026.”

Trump has already announced a 10% tariff, invoking Section 122 of the Trade Act of 1974, and could raise it to 15%. But these levies can only last 150 days, unless Congress agrees to extend them. And Section 122 tariffs are also being challenged in court.

A stronger option is Section 301 of the same Trade Act of 1974, which authorizes the president to impose tariffs and other sanctions on countries engaged in “unjustifiable,” “unreasonable,” or “discriminatory” trade practices. Trump, accusing China of using unfair tactics to gain an advantage in high-tech industries, used Section 301 to impose tariffs on Chinese imports during his first term, and they withstood legal challenges.

On Wednesday, U.S. Trade Representative Jamieson Greer announced a sweeping Section 301 investigation into whether 16 U.S. trading partners, including China and the European Union, were overproducing their goods, flooding the world with their products and harming U.S. manufacturers.

“The United States will no longer sacrifice its industrial base to other countries that could export their excess capacity and production problems to us,” Greer said in a statement. The investigation is widely expected to end with another round of high tariffs.

“The fact that they launched 301 investigations is not surprising,” said trade lawyer Ryan Majerus, a partner at King & Spalding and a former U.S. trade official. “We all knew that’s what they were going to turn to. The challenge is that it’s expanding much further than expected.” This is because many countries have been targeted and the question of whether countries have excess industrial capacity and are overproducing goods “can be framed quite broadly.”

The administration launches another Section 301 investigation into the ban on imported goods made with forced labor. Greer told reporters Wednesday that additional Section 301 investigations could cover issues such as digital services taxes, pharmaceutical drug pricing and ocean pollution.

The administration is also expected to make greater use of Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs on goods deemed to threaten national security after an investigation by the Commerce Department. The United States already imposes Section 232 tariffs on steel, aluminum, automobiles, their parts, and other products.

The report from Democrats on the Joint Economic Committee estimates that the new tariffs will increase the burden on American households this year. This is partly because tariff revenue would be collected for the entire year; Trump needed time to impose tariffs in 2025 and has at times suspended them.

Democrats also assume that American households will absorb 100% of the cost of the tariffs. They cite a Congressional Budget Office report concluding that importers can pass on 70 percent of tariff costs to consumers. But tariffs also allow domestic producers to raise their prices – due to less competition from imports and increased demand for their tariff-exempt products. According to the CBO, the combined costs passed on by importers and higher prices from domestic companies mean consumers end up paying the entire U.S. tariff bill.

The Trump administration’s new tariff measures come as the war in Iran is driving up the price of gasoline and other commodities ahead of the November midterm elections. Voters are already unhappy with high prices.

“If affordability and other policy issues really start to become heavy, that can definitely impact all of this,” Majerus said. “What the world looks like in two months will be very different from what it is today.”