Effective Tariff Rates and Revenues (Updated through June 2025) - Penn Wharton Budget Model

August 14, 2025 · Google News — Tariffs · View source ↗

The Penn Wharton Budget Model (PWBM) recently released an important update on effective tariff rates and projected revenues for the United States, extending its analysis through June 2025. This comprehensive report offers critical insights for importers, customs brokers, and trade compliance officers, highlighting the continued impact of existing trade policies and outlining new tariff adjustments. The findings indicate that average effective tariff rates remain significantly higher than pre-2017 levels, signaling a sustained elevated cost environment for goods entering the U.S. market.

These updated projections have direct implications across various sectors of the economy. Importers of goods subject to tariffs, particularly those affected by Section 301 tariffs on products from China and Section 232 tariffs on steel and aluminum, will continue to face increased import costs. These elevated costs can impact business profitability, potentially leading to higher prices for consumers as businesses may pass on these expenses. Furthermore, the ongoing tariff landscape necessitates a continuous review of global supply chains, sourcing strategies, and competitive positioning for U.S. businesses and their international partners.

According to the PWBM analysis, the average effective tariff rate on all U.S. imports is projected to be 2.8 percent in fiscal year (FY) 2024 and 2.7 percent in FY 2025. This represents a substantial increase compared to the 1.5 percent average rate observed in FY 2017, prior to the implementation of significant new tariffs. Total tariff revenues are projected to reach $90 billion in FY 2024 and $91 billion in FY 2025, a stark contrast to the $38 billion collected in FY 2017. A key development highlighted in the report is the Biden administration's announcement of increased Section 301 tariffs on specific products from China, effective August 1, 2024. These include:

Electric vehicles (EVs): increasing from 25 percent to 100 percent
Lithium-ion EV batteries: increasing from 7.5 percent to 25 percent
Lithium-ion non-EV batteries: increasing from 7.5 percent to 25 percent
Solar cells (processed or not): increasing from 25 percent to 50 percent
Steel and aluminum products (under Section 301): increasing from 0-7.5 percent to 25 percent
Syringes and needles: increasing from 0 percent to 50 percent
Certain personal protective equipment (PPE), including respirators and face masks: increasing from 0-7.5 percent to 25 percent
Cranes: increasing from 0 percent to 25 percent

In light of these persistent and newly adjusted tariff rates, importers and trade compliance professionals must remain vigilant. It is crucial to closely monitor official announcements from the Office of the United States Trade Representative (USTR) and U.S. Customs and Border Protection (CBP) for definitive guidance and implementation details. Companies should proactively review their Harmonized Tariff Schedule (HTS) classifications for impacted goods, assess their supply chain vulnerabilities, and explore potential duty mitigation strategies, such as duty drawback, first sale for export, or tariff engineering where applicable. Engaging with experienced customs brokers and trade counsel can provide invaluable support in navigating these complex and evolving trade policies to ensure compliance and minimize financial impact.