Fact Check: "America cannot dodge the consequences of rising tariffs forever."
What We Know
The claim that "America cannot dodge the consequences of rising tariffs forever" is supported by a range of economic analyses and data. According to a report from the Budget Lab, the effective average tariff rate in the U.S. has risen significantly, reaching 22.5% in 2025, the highest level since 1909. This increase in tariffs is projected to lead to a short-run price level rise of 2.3%, resulting in an average consumer loss of approximately $3,800 per household. Furthermore, the report indicates that U.S. real GDP growth is expected to be lower by 0.9 percentage points in 2025 due to these tariffs, with long-term effects persisting at a reduction of 0.6% in GDP, translating to an annual economic contraction of about $180 billion (in 2024 dollars).
Additionally, a recent analysis from the Federal Reserve emphasizes that higher tariffs disrupt trade efficiency, leading to economic losses not only for the U.S. but also for its trading partners. The study suggests that the negative impacts of tariffs on GDP are significant, with estimates indicating a potential reduction of 0.8% in global GDP under broad tariff scenarios.
Analysis
The evidence supporting the claim is robust and comes from multiple credible sources. The Budget Lab provides a comprehensive analysis of the fiscal and economic effects of tariffs, highlighting both short-term and long-term impacts on consumer prices and GDP. The methodology used in their modeling is consistent with established economic principles, making their findings reliable.
The Federal Reserve also presents a well-researched perspective on the implications of rising tariffs, noting that while tariffs may generate revenue, they also lead to inefficiencies and economic losses. This duality underscores the complexity of tariff impacts, suggesting that while some benefits may be realized in the short term, the long-term consequences are detrimental.
Moreover, articles from reputable sources such as The Economist and BBC reinforce the notion that the economic repercussions of tariffs are both real and significant. They report on the delayed but inevitable negative effects of tariffs on consumption, retail sales, and overall economic growth.
However, it is important to note that some analyses, such as those from J.P. Morgan, indicate that the situation surrounding U.S. tariffs is evolving, and the full extent of their impact may not yet be fully realized. This suggests that while the current evidence points to negative consequences, the economic landscape could change with future policy adjustments.
Conclusion
The claim that "America cannot dodge the consequences of rising tariffs forever" is True. The evidence clearly indicates that the rising tariffs are leading to significant economic consequences, including increased consumer prices and reduced GDP growth. The analyses from various credible sources consistently highlight the negative impacts of tariffs, reinforcing the assertion that these consequences are both unavoidable and substantial.
Sources
- Where We Stand: The Fiscal, Economic, and Distributional Effects of All US Tariffs Enacted 2025 Through April
- Trade-offs of Higher U.S. Tariffs: GDP, Revenues, and the Trade Deficit
- The Effect of Tariffs on the US Economy | Economic Forecast
- The Economic Effects of President Trump's Tariffs
- America cannot dodge the consequences of rising tariffs forever
- America cannot dodge the consequences of rising tariffs for ever
- What have tariffs really done to the US economy? - BBC
- US Tariffs: What's the Impact? | J.P. Morgan Research
