New research from Yale University's Budget Lab reveals that recent U.S. tariff increases may push up to 875,000 Americans below the poverty line by 2025, highlighting the hidden human cost of trade policies. The study estimates these measures could reduce household purchasing power by 0.2-0.3% through price hikes and income suppression, disproportionately affecting lower-income families.
Analysts examined two key poverty metrics: the Official Poverty Measure tracking cash income against inflation-adjusted thresholds, and the Supplemental Poverty Measure accounting for living costs and non-cash resources. Both models show tariffs erode real income while raising poverty thresholds – a double burden for vulnerable households.
"Like an invisible tax, tariffs create economic ripple effects that hit families where they're most vulnerable," the report states, noting import taxes have reached 18% – the highest level since 1933. Researchers emphasize that poverty calculations don't account for most income adjustments, creating a statistical trap for households already struggling with rising costs.
The findings come as policymakers debate the long-term impacts of trade strategies, with economists warning that tariff-driven inflation could deepen existing inequalities. While the study focuses on U.S. data, its implications resonate across global markets where Asian economies remain deeply interconnected with American trade flows.
