Congressional Democrats say Trump tariffs will cost US households more than $2,500 this year

Washington– President Donald Trump is scrambling to make up for revenue the federal government lost when the Supreme Court struck down his largest and boldest tariffs last month.

If the effort succeeds, congressional Democrats warned in a study released Friday, the administration’s import taxes would cost American households an average of $2,512 in 2026, a 44% increase over the $1,745 tariff costs last year. This comes at a time when American consumers are already angry about rising costs of living, and the war with Iran is driving up energy prices.

“Despite the Supreme Court ruling that much of Trump’s tariff agenda is illegal, the Trump administration refuses to provide relief to families,” said Sen. Maggie Hassan of New Hampshire, the top Democrat on the Joint Economic Committee. “As American households continue to struggle with rising costs, the President continues to choose to impose new tariffs that will push prices higher.”

White House spokesman Khush Desai described the study as “fake” and said, “President Trump will continue to use tariffs to renegotiate failed trade deals, lower drug prices, and secure trillions of dollars in investments for the American people.”

Trump last year invoked the 1977 International Emergency Economic Powers Act (IEEPA) to impose double-digit tariffs on nearly every country on Earth.

But the Supreme Court ruled on February 20 that the law does not give the president the authority to impose tariffs. The government must now provide refunds – expected to reach about $175 billion – to importers who paid tariffs under the now-illegal IEEPA.

The administration moved quickly to impose new tariffs, and Treasury Secretary Scott Besent said the new duties would “result in virtually unchanged tariff revenues in 2026.”

Trump has already announced a 10% tariff, based on Section 122 of the Trade Act of 1974, and may raise it to 15%. But these fees can only last for 150 days unless Congress agrees to extend them. Section 122 definitions are also being challenged in court.

The most consistent option is Section 301 of the same 1974 Trade Act, which allows the president to impose tariffs and other sanctions on countries that engage in “unjustified,” “unreasonable,” or “discriminatory” trade practices. Trump, who has accused China of using unfair tactics to gain an advantage in high-tech industries, used Section 301 to impose tariffs on Chinese imports in his first term, and China has weathered legal challenges.

U.S. Trade Representative Jamison Greer on Wednesday announced a sweeping Section 301 investigation into whether 16 U.S. trading partners, including China and the European Union, are overproducing goods, flooding the world with their products and harming American manufacturers.

Greer said in a statement, “The United States will no longer sacrifice its industrial base for the benefit of other countries that may export to us their problems with surplus production capacity and production.” The investigation is widely expected to culminate in a new round of hefty tariffs.

“The fact that they launched a 301 investigation is not surprising,” said commercial lawyer Ryan Majerus, a partner at King. Spalding and a former US trade official. “We all knew that was what they were going to focus on. The challenge is that this is much more broad than anyone expected. This is because many countries were targeted and because the investigation – whether countries have excess industrial capacity and are producing excess goods – can be couched very broadly.”

The administration is conducting another Section 301 investigation into the ban on imported goods made with forced labor. Additional Section 301 investigations could cover issues such as digital services taxes, pharmaceutical drug pricing and ocean pollution, Greer told reporters on Wednesday.

The administration is also expected to make greater use of Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs on goods deemed a threat to national security after an investigation by the Commerce Department. The United States already imposes Section 232 tariffs on steel, aluminum, automobiles, auto parts, and other products.

The report by Democrats on the Joint Economic Committee concludes that the new tariffs will increase the burden on American families this year. This is partly because tariff revenues will be collected for the full year; Trump needed time to impose tariffs in 2025, and he sometimes suspended them.

Democrats also assume that American households will absorb 100% of the cost of the tariffs. They cite a Congressional Budget Office report that concluded that importers could pass on 70% of tariff costs to consumers. But tariffs also allow domestic producers to raise prices – due to reduced competition from imports and increased demand for their duty-free products. The combined costs passed on from importers and higher prices from domestic companies effectively mean that consumers end up footing the entire U.S. tariff bill, according to the Congressional Budget Office.

The Trump administration’s new tariffs come as the war in Iran drives up the prices of gasoline and other goods in the run-up to the midterm elections in November. Voters are already dissatisfied with rising prices.

“If affordability and other political issues start to become really burdensome, that could certainly impact all of this,” Majerus said. “What the world looks like two months from now will be very different than it does now.”