The Math, Courtesy of People Who Do Math

Here is what we actually know about who pays. The Budget Lab at Yale — one of the most credible nonpartisan policy research centers in the country — released a detailed distributional analysis following the Supreme Court's IEEPA ruling and the subsequent Section 122 proclamation [1]. Their findings are worth sitting with. Under the current tariff regime, with the 10% Section 122 surcharge in effect, U.S. effective tariff rates stand at roughly 13% — the highest since 1941. The average American household is losing the equivalent of $600 to $800 per year in purchasing power due to tariff-driven price increases [1]. If the administration extends Section 122 beyond its 150-day limit, that figure jumps to $1,000 to $1,200 per household [4]. And here is the part that doesn't get nearly enough attention: tariffs are a regressive tax. Lower-income households spend a larger share of their income on consumption than higher-income households do. So when prices rise across the board, the bottom of the income distribution takes the hit first and hardest. Yale estimates that the burden on households in the bottom income decile is nearly three times the burden on the top decile, measured as a share of income [1]. In dollar terms: households at the bottom pay around $400 per year more; households at the top pay around $1,800 more. That sounds like the rich pay more — and nominally they do. But the rich are spending less than 0.5% of their annual income on tariffs. The poor are spending over 1% [4]. To put it plainly: this is a policy that asks the people with the least to bear a disproportionate share of the cost of an economic project that benefits — in the near term, at least — defense contractors, steel manufacturers, and Wall Street analysts who write bullish reports on reshoring.

Legal Wrappers and Sticker Prices

Some commentators have been quite satisfied with how events unfolded after the Supreme Court's IEEPA ruling. The argument, roughly: the Court got the constitutional question right, the administration pivoted gracefully to Section 122 and Section 301 investigations, and the trade agenda — the mission, so to speak — continues intact [3]. This is presented as good news. It is constitutionally tidy. But it doesn't change anything for Marcus in Cincinnati. That's the part that gets lost whenever the focus shifts entirely to legal mechanics. IEEPA tariffs vs. Section 122 surcharges vs. Section 301 investigations — these are meaningful distinctions for trade lawyers, importers filing for exemptions, and policy researchers tracking precedent. They are not meaningful distinctions for the consumer paying 15% more for a used car, or for the parent buying back-to-school electronics next August. The price mechanism doesn't care which statute enabled it. The tariff passes through to the consumer either way [2]. And here is what should trouble anyone paying attention: Section 301 investigations — now underway across a broad range of sectors — carry no percentage cap and no expiration date. The 150-day clock on Section 122 is real, but the administration has been explicit about its intentions to rebuild tariff exposure through other authorities on a permanent basis [3]. If that happens, Yale's worst-case scenario stops being a scenario. It becomes the baseline.

Tariffs are a regressive tax because lower-income households spend a larger fraction of their income than higher-income households do on average. The burden, expressed as a share of post-tax-and-transfer income, on the first decile is about three times that of the top decile.

— The Budget Lab at Yale, February 2026

What's Actually Getting More Expensive

• Metal products — steel, aluminum, and downstream manufactured goods (already subject to Section 232; tariffs compound on each other for some products)
• Electrical equipment — appliances, HVAC systems, electrical components used in construction and manufacturing
• Motor vehicles — new and used car prices have already climbed; parts for repair are also affected
• Computers and electronics — laptops, monitors, peripherals; some exemptions exist but the product-specific carve-outs are narrow
• Apparel and textiles — largely exempted from Section 232 and Section 122 for now, but Section 301 investigations could change that by year's end

This is not a list of luxury items. Appliances, vehicles, and electronics are things that working families save up for. They are durable goods — the kind of purchases people make once every several years — which means the sticker shock is visible, memorable, and budget-disrupting in a way that a gradual grocery price increase isn't.

What Trade Policy That Actually Helps Workers Looks Like

None of this means trade policy can't be a tool for economic justice. It can. Other countries use it strategically — and progressives have largely accepted that some degree of targeted protection for strategic industries makes sense, especially when those industries involve national security, green energy supply chains, or communities that were gutted by past trade agreements. The problem is not tariffs per se. The problem is using broad, blanket consumer taxes as a substitute for actual industrial policy. If we want to rebuild domestic semiconductor manufacturing, fund the CHIPS Act. If we want to protect steelworkers, support targeted Section 232 duties on specific products — with the revenue going to worker adjustment programs. If we want to counter China's industrial overcapacity, build a coalition of allied nations and use strategic leverage. These are targeted tools with identifiable beneficiaries and manageable costs. A 10% global import surcharge on everything from automotive parts to electrical equipment — layered on top of existing Section 232 duties — is not industrial policy. It's a tax on the consumer economy, levied disproportionately on people who don't have the income cushion to absorb it, administered in a way that lets corporations pocket the margin improvement while consumers pay the full price [2]. Even the Cato Institute — again, not a socialist organization — has noted that companies tend to keep prices elevated after tariffs are imposed, because the tariff gives them political cover to avoid competitive pricing pressure [2]. The math is not ambiguous. The question is whether we're willing to say it clearly: the tariff tax falls hardest on the people who can least afford it, and calling it "America First" doesn't change who's at the back of the line.

Back to Marcus

The salesperson at the Cincinnati dealership was not wrong to pause before answering. There is no honest way to tell Marcus that prices are coming down soon. The tariff regime — whatever legal wrapper it comes in — is built for durability. The Section 301 investigations now underway are designed to produce tariff authority with no cap and no expiration. The administration has been explicit about this. The van payment Marcus is living with is not a temporary adjustment. It is, in all likelihood, the new floor. That's what it looks like when trade policy is designed primarily around leverage and economics as a negotiating chip — rather than around the concrete economic welfare of the people it's supposed to serve. The headlines are about constitutional law and executive power. The receipts are about who pays. Those are not the same story, and we should stop telling them as if they are.