With new wide-ranging and aggressive tariffs from the Trump administration and the possibility of the 2017 Tax Cuts and Jobs Act (TCJA) expiring at the end of the year, average Americans could face a hefty price tag.
“If the tax cuts expire, the median family would lose about $1,000,” nonresident senior fellow at the Peterson Institute for International Economics (PIIE) Kimberly Clausing told Fox News Digital, citing a model from the Urban-Brookings Tax Policy Center.
And if the recently unveiled tariffs continue, “that would generate an average per household consumer loss of $3,800,” she added, pointing to the Yale Budget Lab’s estimate.
This, she said, would be “far more damaging to Americans’ pocketbooks than the tax cut expiration.”
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“Tariffs are also more damaging to the efficiency of our economy as well as our relations with allies and partners abroad,” Clausing continued.
It comes as House and Senate Republicans navigate their slim majorities in Congress to pass a massive bill advancing President Donald Trump’s agenda by the end of this year, via the budget reconciliation process. GOP leaders hope to extend Trump’s 2017 tax cuts in the legislation, in addition to policy overhauls on energy and border security.
On April 2, dubbed “Liberation Day” by Trump, he announced a baseline duty of 10% on all imports to the U.S., with customized tariffs set for countries with higher tariffs in place on American goods. The 10% tariffs began on Saturday, and others will start on April 9.
Some examples of the customized tariffs assigned to specific countries are 34% (not including previous 20% tariffs) on China, 20% on the European Union, 25% on South Korea and 26% on India, among many others.
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Claude Barfield, a former consultant to the office of the U.S. trade representative and senior fellow at the American Enterprise Institute, discussed the tariffs with Fox News Digital, explaining, “Some people think that certainly it will raise prices in some areas, but there’s a difference in raising prices and having a full inflationary effect.”
“That doesn’t mean… that you won’t notice it or a consumer won’t notice,” he added.
Tax Foundation’s Garrett Watson said one big risk of the new tariffs is that they could offset “much or all the benefits of extending the expiring TCJA provisions.”
“In our October 2024 analysis, for example, a hypothetical set of tariffs of a similar size as the combined tariffs enacted so far nearly wiped out the benefits of the tax cut extensions,” he explained.
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The GOP-led House Committee on Ways and Means released a memo in recent months arguing that average taxpayers would pay 22% more if the 2017 tax cuts were left to expire. “A family of four making $80,610, the median income in the United States, would see a $1,695 tax increase if the Trump tax cuts expire,” the committee release said.
“This is worth about nine weeks of groceries to a typical family of four across the country,” it added.
Daniel Bunn of the Tax Foundation said, “In short, families across the country will continue to face higher costs if lawmakers in Washington don’t focus their efforts on pro-growth and fiscally responsible economic policies.”
Both House and Senate Republican leaders have emphasized that they do not want to let Trump’s tax cuts expire, and are so far optimistic that they will not.
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The effect their expiration would have on Americans was emphasized, however, by President of Americans for Tax Reform (ATR) Grover Norquist in an interview with Fox News Digital.
“It’d be a real shock per family, per person to see in real life, times thousands of dollars,” he said.
But what’s more is that the expired cuts, effectively an increase in taxes, “would transfer hundreds of billions that was flowing into corporate investment and jobs and new investment, and that would go straight to the government instead,” he explained.
Norquist expressed confidence in congressional Republicans’ ability to get the tax cuts extended, however. “I believe we are close,” he said.
“I think it is as certain as anything is in the world in politics. It is extremely likely that we’re all set.”
Senate Majority Leader John Thune, R-S.D., House Speaker Mike Johnson, R-La., and the White House did not provide comment to Fox News Digital in time for publication.
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