The economic impact of tariffs from President Donald Trump could be felt by Americans now and in the coming months, as higher costs for imports could lead to companies passing costs onto consumers. A new survey suggests that low-income consumers may be the ones hurt the most.
What Happened: American consumers are dealing with higher-than-expected inflation and high unemployment rates, creating potential hardships for people who do not have savings or a comfortable income.
A new survey from non-partisan research center The Budget Labs from Yale says tariffs hurt poor people in America the most and could add to the number of people living in poverty.
"Because tariffs reduce the purchasing power of low-income households (either by decreasing nominal incomes or by increasing prices), they also affect poverty," the report says.
The report said tariffs are an indirect tax on consumers that increases prices.
"This loss of purchasing power – a reduction in what economists call ‘real' incomes – represents the direct economic burden of tariffs."
The Budget Labs said that tariffs are felt "unevenly" due to different spending habits, hurting the people who live paycheck to paycheck the most.
Using household income and inflation-indexed thresholds, the report estimates that the U.S. official poverty rate will rise from 10.4% to 10.7%. This would add 875,000 people to poverty due to tariffs.
Included in the 875,000 estimate is 375,0000 children.
Another estimate using different factors, including government programs like food stamps, along with child care and medical expenses, predicts that 650,000 people could be declared in poverty, with 150,000 of the total being children.
The two different methods generate an estimate of 650,000 to 875,000 new people in poverty due to tariffs.
Why It's Important: These are significant numbers and show the potential indirect and direct impacts tariffs can have on American consumers. The report comes with the stock market at record highs, with the SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the S&P 500, hitting all-time highs on Friday.
The S&P 500 ETF Trust has hit record highs multiple times in 2025, with investors brushing off concerns of unemployment, inflation and tariffs.
The White House is also brushing off the study from The Budget Lab.
"Biden economists running the Yale Budget Lab," White House spokesman Kush Desai told the New York Post.
Desai said the research center "didn't get anything right" when Biden was president and will be wrong with Trump in the presidency as well.
"Economic forecasters made similar doom-and-gloom predictions during President Trump's first term, when the very same agenda that the Administration is pushing now of tariffs, tax cuts, deregulation, and energy abundance unleashed historic job, wage, and economic growth," Desai added.
Trump's tariffs, which are currently part of a Supreme Court hearing, could send inflation higher, according to economists.
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