One year after Liberation Day, Trump's tariffs are the largest US tax increase since 1993. The Supreme Court struck down IEEPA-based tariffs, 24 attorneys general are suing, and households are paying the price at the checkout counter.
One year after President Donald Trump declared Liberation Day and launched the most aggressive tariff regime in modern American history, the economic verdict is in — and it is being felt directly in the wallets of ordinary Americans. According to analysis from the Tax Foundation, Trump's tariffs now represent the largest US tax increase as a percentage of GDP since 1993, costing the average American household approximately $1,500 per year. The effective tariff rate stands at 13.7 percent as of February 2026, with a global 10 percent tariff under Section 122 of the Trade Act set to remain in effect until July 24. Industries across the board — retail, automotive, consumer packaged goods and pharmaceuticals — are scrambling to navigate supply chain disruptions that show no sign of easing.
The legal walls are closing in on the tariff regime from multiple directions. The Supreme Court delivered a landmark blow by nullifying the broad tariffs Trump imposed under the International Emergency Economic Powers Act, ruling that trade deficits do not constitute the kind of national emergency the IEEPA was designed to address. A coalition of 24 attorneys general and governors has filed suit to block additional tariffs imposed under balance of payments authority, arguing they are unlawful, unprecedented, and based on trade deficits rather than genuine economic crises. Despite these setbacks, Trump has doubled down, threatening 50 percent tariffs on any country supplying military weapons to Iran — a threat analysts have called legally empty, since it is unclear under what authority such tariffs could be imposed given the Supreme Court's ruling.
The irony that has not escaped economists is that Trump's trade war has wreaked remarkably little havoc on actual trade patterns. According to the Peterson Institute for International Economics, trade flows largely rerouted through third countries, meaning the tariffs functioned primarily as a tax on American consumers rather than a tool of trade policy. The trade deficit — the very metric Trump cited as justification — has not meaningfully improved. Meanwhile, the political fallout continues: Wisconsin voters just handed a landslide victory to liberal Supreme Court candidate Chris Taylor, part of a pattern of Democratic overperformance in elections since Trump took office that political analysts increasingly attribute to pocketbook frustration. The question Americans are asking is not whether tariffs work in theory, but why they are paying more for groceries, cars and medicine while the stated goals of the policy remain unmet.