President Donald J. Trump’s aggressive tariff policy is reshaping global trade, and government coffers.
But new research warns the sweeping import taxes may also carry a domestic cost: pushing hundreds of thousands of Americans below the poverty line.
An analysis published Tuesday by The Budget Lab at Yale projects that Trump’s latest tariff increases will drive an additional 875,000 people into poverty by 2026, including 375,000 children.
The estimates are based on the government’s Official Poverty Measure, which tracks pre-tax income.
The findings highlight how tariffs disproportionately impact lower-income households, which devote larger shares of their paychecks to necessities and often purchase more imported goods, the very items most exposed to tariff-driven price hikes.
“Tariffs are a tax on American families,” said John Ricco, associate director of policy analysis at The Budget Lab.
“Because tariffs are a tax on goods and services, instead of income, they hit harder on people who spend a higher percentage of income than they save.”
The report estimates that the poverty rate could climb from 10.4 percent to 10.7 percent once tariffs are factored in.
Using the supplemental poverty measure, which accounts for expenses like childcare, housing and medical costs, as well as government aid programs, researchers projected that tariffs will add 650,000 people to the poverty rolls, including 150,000 children.
The U.S. Census Bureau reported Tuesday that nearly 36 million Americans were living in poverty last year, though the poverty rate dipped slightly to 10.6 percent as rising wages offset inflation.
The White House, however, defended the policy. In a statement to CNN, spokesperson Taylor Rogers said Trump’s “America First” economic agenda, combining tariffs with tax cuts, deregulation, and energy expansion, had already helped working families and would “close the chapter on Joe Biden’s economic disaster.”
The analysis underscores the stakes of the tariff regime, which has boosted customs revenue but also risks eroding purchasing power for millions living paycheck to paycheck.
