A new analysis from the Peterson Institute for International Economics projects significant economic headwinds from U.S. tariffs implemented through September 2025. The study forecasts a 0.62% reduction in U.S. GDP growth in 2026, a 1% increase in inflation above baseline, and declining real wages for American workers.
Employment is expected to decline most sharply in durable goods manufacturing, mining, and agriculture, sectors most vulnerable to trade, while manufacturing is also likely to experience reduced investment. While the tariffs alone will not trigger a recession, they represent a substantial drag on economic growth, with negative impacts persisting throughout the coming decade as workers shift from trade-exposed sectors into services at lower wages. Read more