Repeal All Tariffs Imposed Since 2017

Tariffs are taxes imposed on imported goods. They are legally paid by the importer of record, and economically, the burden may be shared across foreign exporters, importers, other business owners, or workers. Prior to 2025, tariffs comprised less than 2 percent of federal tax revenues; throughout 2025, that share has climbed to nearly 5 percent of federal revenues as sector-specific, country-specific, and broad-based tariffs have been imposed under various authorities.

The effective tariff rate, a measure of customs duties revenues as a share of goods imports, rose from 1.4 percent in 2017 to 2.7 percent in 2019 and 7.7 percent in 2025. It will likely be lower in 2026 after the *Learning Resources *Supreme Court decision struck down the majority of the new tariffs imposed under emergency authorities.

This option would revert US tariff policy back to 2017 levels, removing all sector-specific, country-specific, and broad-based tariffs that have been imposed under Section 232, Section 301, and Section 122 authorities. Removing tariffs would reduce the tax wedge they impose, increasing returns to labor. Removing tariffs on capital goods and inputs would lower the cost of capital, increasing incentives to invest. These estimates only capture the effect of tariffs reducing after-tax returns to labor, likely understating the economic effect on investment and the capital stock. Removing tariffs may also reduce foreign retaliation, whether tariff or non-tariff barriers on US exports, which would further boost US output. These estimates assume no changes in foreign retaliation.

On a conventional basis, this option would increase the primary deficit by $1,305.4 billion over the budget window. Long-run GDP would rise by 0.3 percent and long-run GNP by 0.1 percent. On a dynamic basis, the primary deficit would increase by $945.3 billion from 2027 through 2036, $360.1 billion less than the conventional estimate. Incorporating changes in interest costs, the publicly held debt-to-GDP ratio would be higher than baseline, reaching 177.7 percent by 2056.

On average, in 2036, taxpayers would see increases in their after-tax incomes of 0.7 percent. The top quintile of taxpayers would experience a 0.6 percent increase, while the bottom quintile would experience a 0.7 percent increase. On a long-run dynamic basis, taxpayers would see a 0.9 percent increase on average.