When the cost of a basic washing machine at a big-box store goes up by $80 in six months, most people think the store is to blame. But the receipt doesn’t show the full picture. Behind that price increase, and similar rises in laptops, cars, groceries, and building materials, is a system of tariffs that has quietly become the biggest tax increase on American families in over 30 years.
The Congressional Budget Office’s 2026 budget report shows that customs duty income is reaching levels not seen since the early 1970s.
Separately, the Yale Budget Lab estimated in late 2025 that the existing tariff system would lower the average family’s buying power by about $1,700 each year. This estimate included the effect of higher tariffs on imported goods pushing up prices of items made in the U.S. After considering some short-term relief, like businesses lowering profits or shifting where they get products from, the real cost to a typical family in 2026 is closer to $1,500 per year, according to Yale’s model. Both studies show a tax burden that, in terms of the economy, is as big as the 1993 tax increase that raised income tax rates and the gas tax.
These tariffs didn’t come all at once.
They built up over time with different orders from the White House.
In February 2025, the White House brought back Section 232 tariffs on steel, which had been partially removed, and officially announced the new duties.
Construction, manufacturing, and car companies felt the impact quickly. Then in January 2026, another action targeted imports of semiconductors, machinery used to make them, and other related products, adding more tariffs to supply chains for electronics, vehicles, and home appliances.
In March 2026, the U.S. Trade Representative started new investigations under Section 301 into certain industries.
Section 301 was used to bring in huge tariffs on Chinese goods during the Trump administration, and its return suggests more tariffs could come before the system stabilizes.
The CBO doesn’t break down the revenue from each tariff individually, but the overall trend is clear.
Customs duty income began rising right after these executive actions, and now the total collected as a share of the economy matches the size of the 1993 tax package. The main difference is that the 1993 tax required months of debate in Congress and passed by a narrow vote. These tariffs were added through actions by the President and government agencies.
The $1,500 cost hits families in a few ways.
When a tariff increases the price of imported steel, domestic steel companies often raise their prices too, making even products made in the U.S. more expensive. The same happens with semiconductors used in refrigerators, cars, medical devices, and phones.
The difference between the $1,700 figure and $1,500 reflects real-world factors that sometimes slow down the impact.
Some stores have taken on part of the cost to stay competitive. Some importers have moved goods through countries with lower tariffs. But these strategies have limits. Stores with already tight margins, especially in grocery and discount stores, can’t absorb extra costs forever. Also, moving supply chains needs money, which eventually gets passed on to customers.
This burden falls more heavily on lower-income families.
They spend a larger share of their money on everyday things like food, clothes, appliances, and transportation. According to the Bureau of Labor Statistics, the bottom fifth of families spend more than 60% of their after-tax money on these things, while the top fifth spend about 30%. A $1,500 increase in cost is almost 4% of a $40,000 income. For someone making $200,000, it’s less than 1%.
Court rulings are also changing the tariff system.
After the Supreme Court ruled that some tariffs under the International Emergency Economic Powers Act were invalid, companies started asking for refunds through Customs and Border Protection. A CBP official said a new refund system could be ready in 45 days, though the total value of claims hasn’t been announced.
CBP has also given guidance on which shipments were affected by these now-invalidated tariffs and when they were applied.
But the process may take time. Even if importers get their money back, there’s no rule that requires them to lower prices for consumers. So the refunds may help businesses but not necessarily help shoppers at the register.
The result is a tariff system in flux: new duties stacking up in some sectors while others are being unwound by judicial order. For businesses trying to plan inventory and set prices, the uncertainty itself is a cost, one that often gets baked into higher prices as a hedge.
Tariffs are a type of tax. They are collected by the government on goods that are brought in from other countries, and the money goes into the same government accounts as income taxes. However, tariffs are not usually seen as a tax increase because they are not passed by Congress and are instead decided by the president. They are also seen as part of trade policy, not fiscal policy, so they don’t get as much public attention as a major tax bill would.
This difference in how they are seen is important.
For example, a big tax package in 1993 was widely covered in the news, went through a tough vote, and became a major topic in the 1994 midterm elections. But the current tariffs are being added through a series of presidential orders and government actions. Each of these actions gets some media attention, but they don’t add up in a way that clearly shows the total cost to the public.
The White House and the USTR have not publicly argued with the Budget Lab’s estimates of how much households are paying or the CBO’s predictions about the money the government will get.
Officials say the tariffs are meant to help American businesses, reduce trade deficits, and pressure other countries to make better deals. Whether these goals justify the cost to consumers is a policy issue that will become clearer as the 2026 midterms approach.
Several upcoming events could affect how much the $1,500 annual cost will be.
The Section 301 investigations started in March 2026 might lead to more tariffs on some types of imported goods, especially in areas where the USTR sees too much production abroad. Trade talks could offer some relief: if agreements result in lower tariffs on specific products, both importers and consumers might save money. Also, court cases that are still being decided could change the rules around tariffs, either supporting or stopping parts of the current policy.
What is clear is the size of the impact.
According to the CBO’s revenue forecasts and the Budget Lab’s cost models, families are facing a tax increase that is as big as any passed by Congress in a long time. The difference is that this tax isn’t on a tax form, but rather at the checkout counter, at car dealerships, and in stores, spread across thousands of small charges. These small amounts add up and affect household budgets for people of all income levels.
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