(Not So) Fun Fact: During the 2025 fiscal year, U.S. Customs and Border Protection collected $216.7 billion in tariff revenue, a 146-percent increase from 2024. For the first month of fiscal year 2026, the federal government already has collected $34.3 billion in tariff revenue – a near doubling of the average monthly tariff revenue throughout FY 2025.

Where Are We Now?

What’s Happening: 2025 has been a fast-paced and chaotic year for international trade policy. Since President Trump’s inauguration, there has been a torrent of ever-changing tariff proposals, threats, and actions that have had major implications for foreign policy, U.S. employment, and inflation. This persistent uncertainty has been a headache for U.S. businesses, consumers, trade partners, and analysts alike as they do not know which way the trade winds are blowing. The culmination of the president’s trade agenda came on “Liberation Day,” when a wave of new tariffs as high as 50 percent were announced, only to be repeatedly revised, delayed, or canceled entirely. Recently, a Wall Street Journal article highlighted that many economists’ predictions about these tariffs fell flat, but glossed over the fact that predictions changed throughout the year alongside the Trump Administration’s many trade policy changes. While today’s consumer price index report (inflation data) came in slightly lower than expected – 2.7 percent rather than 3.1 percent – it is still higher than April’s 2.3-percent low and the Fed’s 2-percent target. Further, 2025’s relatively mild inflationary figures are not indicative of tariffs having mild economic impacts, but instead point to other factors dampening their potency, such as low oil prices, higher productivity, and the gradual passthrough of tariff costs to consumers.

Why It Matters: The tariff cost outlook has drastically changed over the course of 2025, with the effective tariff rate skyrocketing from close to 3 percent in early January to 28 percent post “Liberation Day,” and which now sits at roughly 14–16 percent. The decline from the peak is due primarily to the pause of “Liberation Day” tariffs, which allowed for trade deals that solidified slightly less drastic tariff rates. The end of the trade war with China – which faced tariffs over 145 percent – alongside a few tariff exemptions for food products, semiconductors, and other imports, has also eased tariff burdens. Each of these trade policy alterations has caused tariff collection estimates, gross domestic product growth projections, and household cost estimates to shift. The Shipment’s tariff cost estimates have changed multiple times as well. The day after “Liberation Day,” American Action Forum research put total annualized tariff costs at $366.5–391.6 billion. As of December, the Shipment estimates annual tariff costs sit around $250 billion. Factoring in Section 232 tariffs, this tariff cost estimate approaches $300 billion annually, which is in line with the Bipartisan Policy Center’s current tariff tracker. Other tariff estimates include the Penn Wharton Budget Model’s, which projects $323 billion in 2026 and an average of $271 billion annually between 2026–2035, the Tax Policy Center’s, which estimates $247 billion in 2026 and an average of $230 billion annually over the same 10-year span, and the Tax Foundation’s, which puts the total at $191 billion in 2026 with an average of $214 billion annually over the next decade. Finally, the Congressional Budget Office projects an average of $250 billion in annual revenue over the next decade – down from its August projection of $330 billion. Despite the range of estimates, there is consensus that U.S. businesses and consumers bear the vast majority of tariffs and that 2026 will continue to see upward pressure on consumer prices as businesses pass on more costs.

Looking Ahead: 2026 will likely be another turbulent year for trade policy. The Supreme Court’s decision on President Trump’s authority to use the International Emergency Economic Powers Act (IEEPA) to impose tariffs will set the stage for the rest of the year and the remainder of the Trump Administration. If IEEPA tariffs are struck down, it will not spell the end of protectionism or high tariff rates. Instead, the decision would force the administration to pursue tariff authorities with formal processes, which take time, require public comments, and put boundaries on implementation. The second-most impactful trade event of the year will likely be the renegotiation – or end of – the United States-Mexico-Canada Agreement (USMCA), the free trade agreement President Trump worked out during his first term.

End-of-Year Highlight Reel

Silver and Gold Exportations: While silver and gold may be great decorations, they are also valuable assets due to their investment and industrial uses. The price of both commodities has reached record highs this year – outperforming the S&P500 by a multiple of four – due to strong investor demand, central bank purchases, inflation fears, and supply constraints. This trend is expected to continue in 2026 for the same reasons. Silver may face new supply constraints, however, due to Chinese export restrictions taking effect in January. Chinese silver producers and distributors had to apply for permission to export in October based on export performance between 2022–2024. For new applicants, the domestic production threshold to receive approval was 80 tons, which effectively puts large, state-owned enterprises at the forefront of China’s silver exports. Out of 50 applications, six were rejected, which will further concentrate the market and raise global price-risk premiums as companies look to de-risk supply chains. Keep an eye out for a possible future trade dispute with China as the Shipment noted here.

Mexico Joins the Fray: Last week, the senate of Mexico approved tariffs of between 5–50 percent on more than 1,400 products it imports from countries with no trade agreement, including China. These tariffs will take effect in January and are expected to raise between $1.7–$3.8 billion and annually, while also contributing to higher inflation, which the Shipment expects to have an indirect negative impact on the price of U.S. consumer imports from the country. Impacted products include textiles, clothing, plastics, household appliances, toys, furniture, footwear, auto parts, steel, and aluminum, among other things. The Chinese government condemned the new protectionist measures, with analysts in China anticipating retaliation. China represents about 17 percent of Mexico’s imports and 3 percent of exports, but the United States makes up 50 percent of imports and 75 percent of exports. This may explain why Mexico is attempting to appease U.S. concerns over China’s use of Mexico as a “backdoor” into the U.S. market, and solidify trade relations going into 2026 USMCA negotiations.

Uh Oh, The U.S.-UK Trade Deal Hiccup: The U.S.-UK technology cooperation agreement announced in September has been paused by the Trump Administration, which says the UK is not making progress on the U.S.-UK Economic Prosperity Deal (EPD) announced in May. Many may recall that the EPD was the first U.S. trade deal touted by President Trump and his trade team in his second term as a crowning achievement. The Shipment highlighted the day the deal was released that the UK never planned on making significant changes to its non-tariff barriers, particularly its food standards on hormone-treated U.S. beef. Additionally, the EPD never addressed the UK’s digital services tax, which impacts U.S. technology companies, representing another point of contention that may prove challenging for the future of this agreement. On the line is more than $40 billion worth of investments in the United Kingdom, as well as the collapse of U.S. trade relations with a close ally.

2025 Shipment Count: 48

2025 Tariff Word Count: 1,085