Tariff expectations versus reality

When President Donald Trump announced tariffs in 2025, economists expected a sharp rise in inflation, possibly followed by layoffs and a recession. However, the impact on the economy has been more muted than expected.

A new working paper, co-authored by Gita Gopinath at Harvard and Brent Neiman at the University of Chicago, looked into why. “Marketplace” host Kai Ryssdal spoke with Gopinath about their findings.

“What we find is that the actual tariff rates that U.S. importers are paying at the border is about half of the statuatory rates that have been announced,” Gopinath said. “While the statuatory rate is around 27%, the actual rate is closer to 14%.”

There are several reasons for the gap, including a shipping lag, increased use of the United States-Mexico-Canada Agreement, and tariff exemptions granted by the Trump administration.

To hear more of the conversation, use the audio player above.