Market Insider — U.S. trade policy is once again under scrutiny as new research from Yale University suggests that President Donald Trump’s sweeping import tariffs could push close to one million additional Americans into poverty by 2026.
The Budget Lab, a research center at Yale, released a report on September 9 projecting that higher import duties would add roughly 875,000 people to the poverty rolls within two years, including 375,000 children. The analysis, based on the U.S. Census Bureau’s Official Poverty Measure, highlights how tariffs act as an indirect tax on consumers by raising the cost of goods and services.
Economists warn that low-income households will be hit hardest, as they devote a larger share of income to essential goods—many of which are imported and directly affected by tariffs. Official data shows nearly 36 million Americans were already living in poverty at the end of 2024, raising concerns that tariff-driven price pressures could deepen inequality.
“Import tariffs are essentially taxes on American families,” said John Ricco, Policy Research Director at The Budget Lab. The center estimates the poverty rate could climb from 10.4% to 10.7% under current tariff policies.
The White House has pushed back strongly. Spokesperson Taylor Rogers argued that Trump’s first-term agenda “helped families grow wealthier while reducing income inequality,” and said a second-term mix of tax cuts, tariffs, and investment incentives would “reverse the economic disaster under Joe Biden.” Rogers also pointed to August’s unexpected 0.1% decline in the Producer Price Index (PPI) as evidence that tariffs have not fueled inflation as critics predicted.
Still, market analysts remain cautious. Economists at Barclays warned that headline PPI data masked “underlying strength” in price pressures, noting inflation risks remain persistent despite easing in some areas.
Beyond the economic fallout, Trump’s tariff strategy faces legal uncertainty. After setbacks in the U.S. Court of International Trade and the federal appeals court in Washington, the administration has turned to the Supreme Court, which agreed on September 9 to hear the case. If the tariffs are struck down, as much as 70% of Trump’s announced trade measures this year could be invalidated.
Despite the legal risks, insiders suggest the administration is unlikely to abandon the tariff push. With U.S. import duties now averaging 17.4% — the highest since 1935 — investors and businesses are bracing for prolonged trade tensions that could ripple through supply chains, consumer demand, and global markets.
