President Donald Trump has set tariffs to address a variety of US economic and national security issues, while also generating revenue. And soon after taking office in early 2025, he ordered new tariffs in almost every country. But he was also quick to dismiss or abandon much. The process of imposing and reversing tariffs produced four main types of results, in rough chronological order: stabilization of financial markets, concessions from foreign governments, promises of corporate investment, and low US consumer prices for some goods.
The combined economic effects of the reversals are unclear at this point, but to get a sense of their relative potential importance, we estimate the hypothetical annual tariff revenue that the United States would collect if each of the initial tariff threats were implemented within a year. This measure provides a common basis for comparing the scale of tariff threats and concessions or reversals made. According to this measure, the biggest tariff threat is the influence of negotiations for foreign economic concessions, as seen in table 1 below.
| Annual threatened rates and accumulated rates prior to reversal, by effect category | ||||
|
Effects category |
Collection window (threat date → date reversal announced) |
Threatened |
Actual revenue collected at additional rates (in the window) |
Basis for assessment |
| Financial turmoil – April 9 reciprocity rate pause | ||||
| Liberation Day Reciprocal Rates (55 countries) | 2 Apr – 9 Apr 2025 (rates only apply on 9 Apr) | $262.7B | sing | Reciprocal tariffs rest on the import value of 2024 |
| Subtotal – financial turmoil | $262.7B | |||
| Negotiated leverage – rate de-escalation deal | ||||
| China, reciprocal IEEPA tariffs | 9 Apr – 12 May 2025 | $495.7B | $46.0B | 125% is a negotiated reversal, calculated on the value of 2024 imports |
| Negotiating UK rates (cars, flights) | April 3 – June 16, 2025 | $1.7B | Cars: $210M; plane: $130M; total: $0.3B | Sector-specific tariff cuts, 2024 import value |
| EU tariff negotiation (automatic) | 3 Apr – 5 Sep 2025 | $6.3B | $2.7B | Sector-specific tariff cuts, 2024 import value |
| Japan rate negotiation (automatic) | 3 Apr – 22 July 2025 | $5.2B | $1.6B | Cut automatic tariff from 27.5% to 15%, automatic import 2024 |
| South Korea, reciprocal IEEPA rates | 2 Apr – 29 Oct 2025 | sing | $8.4B | Reciprocal tariffs negotiated, import value 2024 |
| Subtotal – discuss the impact | $508.9B | $59.0B | ||
| Consumer prices – food tariff relief | ||||
| Reduction of tariffs on agricultural products | 2 Apr – 14 Nov 2025 | $2.9B | $1.8B | 10% cancellation fee |
| Eliminate beef tariff quotas | 2 Apr – 26 Aug 2025 | $2.1B | $0.8 B | 26.4% tariff is waived on the first 1.2M tons (annually) |
| Subtotal – consumer price | $5.0B | $2.6B | ||
| Industry subsidies – Section 232 relief | ||||
| Industrial subsidy assistance (aluminum) | 2 Apr – 9 Oct 2026 | $5.8B | $1.3B | Company-specific Section 232 rate reductions; only aluminum tariffs were collected before the reversal |
| Subtotal – industry subsidies | $5.8B | $1.3B | ||
| Total estimated annual revenue forgone | ~$782.4B | ~$62.9B raised | ||
| NA = not applicable Note: Japan’s and South Korea’s Liberation Day reciprocal rate breaks are not included in negotiated rates—leverage is an exact duplicate of the financial turmoil estimate above. Annualized revenue forgone is estimated by multiplying 2024 imports of goods affected by the reduction in tariff rates (peak rate minus tariffs after a break or deal). The revenue collected is estimated by dividing the 2024 import of goods affected by 366 to obtain the daily import value, because there are 366 days in 2024. The number is then multiplied by the number of days the additional rate is applied and the difference between the original rate and the peak rate in the collection window. Both figures are static estimates based on 2024 import values and do not account for changes in trade volumes, product exemptions, or duty payment periods. |
||||
| Source: PIIE calculations from United States International Trade Commission, UN Comtrade, US Census, US Bureau of Economic Analysis, Congressional Budget Office, and Federal Register data. | ||||
Financial disaster
Shortly after Trump announced the new tariffs on April 2, 2025 – which he called “Liberation Day” – he backed down on some, in effect arresting the stock market. On April 2, he ordered a universal basic 10 percent tariff on almost all imports to be applied immediately, and he threatened additional “reciprocal” tariffs on individual trading partners to reflect the bilateral merchandise trade surplus with the United States, to take effect on April 9. spiked about half of 1 percentage point.
On April 9, Trump suspended “reciprocal” tariffs for 90 days (a period that was later extended) but kept the base rate at 10 percent. Stock and bond markets rally. If all of the threatened “reciprocal” tariffs were to be implemented in full, they would generate $262.7 billion in annual U.S. tariff revenue, assuming U.S. import volumes and prices do not change in response (the same assumptions apply to subsequent calculations below).
Negotiated leverage
Tariffs are often withdrawn or lowered to get concessions by trading partners. Threatened tariffs on imports from China show A in the use of negotiating leverage. On April 9, 2025, after pausing the “reciprocal” tariffs announced on Liberation Day, Trump threatened an additional 125 percent tariff on imports from China, worth $495.7 billion. Beijing was quick to retaliate. Threatened tariffs are a huge threat to the global economy. Thus, on May 12, 2025, the United States and China agreed to reduce this tariff for 90 days to 10 percent in the United States and to 30 percent in China but leave in place the other US tariffs in China.
On Liberation Day, Trump threatened a “reciprocal” tariff of 27.5 percent on Britain. In June 2025, the United States agreed to reduce this tariff to 10 percent for 100,000 car imports per year. It also agreed to eliminate the basic 10 percent tariff on civil aircraft and set most-favored-nation quotas on steel and aluminum components. In turn, the UK expanded market access for US meat and ethanol exports. Before it was withdrawn, the threatened US Liberation Day tariffs on British cars and planes amounted to $1.7 billion.[1]
The United States has threatened to impose a 20 percent “reciprocal tariff” on the European Union. On July 27, 2025, Trump met with European Commission president Ursula von der Leyen on a golf course in Turnberry, Scotland, and agreed on a US-EU trade and investment framework. They implemented the framework for the United States with an executive order of September 2025. The EU implementation goes through the EU Parliament. The combined U.S. tariff in the European Union is capped at 15 percent. Next, the European Union agreed to eliminate tariffs on US industrial exports; provide preferential access to US seafood and agricultural exports; acquiring US energy, artificial intelligence (AI), and semiconductor exports; and invested $600 billion in US projects over three years. Threatened U.S. tariffs on autos before the Turnberry deal totaled $6.3 billion a year.
Finally, in July 2025, the United States and Japan reached a framework agreement, which was recorded in a September 2025 memorandum of understanding. The 24 percent US Liberation Day tariff on Japan was generally limited to 15 percent, but separate tariffs of 50 percent for steel, aluminum, and copper remained in place. In turn, Japan agreed to invest $550 billion in US projects, buy 100 Boeing airplanes, increase rice imports by 75 percent, and buy $8 billion in other US agricultural products. Before the July 2025 deal, the threat of tariffs on auto imports from Japan was about $5.2 billion a year.
Also at the end of July 2025, the United States and South Korea reached a framework agreement, which was finalized in October 2025. The US Liberation Day tariff that threatened 25 percent in Korea was limited to 15 percent, but other tariffs remained in place. Korea agrees to invest $350 billion in approved US projects. Threatened tariffs on imports from Korea amount to $20.3 billion annually.
Leverage negotiations with Canada remain an ongoing saga. On an annual basis, threatened rates of US $ 1.3 billion.
Industry subsidies
Global Trade Alert recently discovered a new method for tariff reversal: the reduction or elimination of import tariffs by US companies that make approved commitments to invest in US factories. Between April and August 2026, the executive order authorizes the secretary of commerce to negotiate company-specific tariffs to address what the Trump administration has identified as national security threats under Section 232 of the Trade Expansion Act of 1962. The administration is imposing or threatening new duties on pharmaceuticals, aluminum, polysilicon, and drone derivatives. The government has made agreements with several companies under this authority but has not announced the terms. US imports of the specified goods total $264 billion in 2025. Threatened tariffs on aluminum, before the reversal, are estimated at $5.8 billion per year.
Consumer price
After more than five years of high inflation, Americans are sensitive to any policy that stretches household budgets. Serious research shows that tariffs are almost entirely paid by US households and business firms, not by foreign exporters.
Trump’s executive order issued on November 14, 2025, exempts all Liberation Day tariffs on various tropical products plus beef, oranges, and tomatoes. The order does not mention consumer prices, but an attached White House fact sheet does. On an annual basis, the threatened rate was $2.9 billion before it was canceled.
In August 2026, Trump announced that, for the next three months, up to 100,000 tons of beef per month can enter the US without tariffs, a clear step to provide relief from high prices on the meat counter. The threatened beef tariff is $2.1 billion per year.
Summing up
According to these estimates, the biggest effect of the threat and reversal of these tariffs is to send money to negotiate for concessions by foreign partners. Trump’s biggest threatened tariffs are Chinese imports, worth $496 billion a year. Other reversals, concerning the United Kingdom, the European Union, and Japan, bring the total threat under this title to $509 billion. Collectively, reversals with major effects in addition to leverage negotiations deal with threats totaling $274 billion annually.
Record
1. Steel and aluminum tariffs are not included in the estimate of annual threatened tariffs because the US-UK Economic Welfare Agreement does not eliminate or reduce these duties. However, the agreement prevented the rate hike. As such, the duty is not considered an additional tariff burden related to the agreement.