The tariff rate on the average imported product is lower right now than it has been in months, and almost nobody has noticed, because it dropped as the result of a Supreme Court ruling rather than a tariff cut anyone announced with fanfare. The nonpartisan Congressional Budget Office estimates the country’s effective tariff rate at 10 percent as of late July, five percentage points below where it stood in November 2025. That is the number that best approximates what shows up, in aggregate, when a dollar of imported goods crosses the border today.
What “effective tariff rate” actually measures
The effective tariff rate is not any single tariff on any single product; it is an import-weighted average across everything the country brought in, calculated using 2024 import volumes as the baseline. According to CBO’s own description of its method, the ETR is meant to answer a specific question: if all of today’s tariff rates had applied to the mix of goods the U.S. actually imported in 2024, what would the average rate have worked out to. That baseline-year approach means the figure moves when tariff policy changes, even though the underlying pattern of what gets imported does not shift nearly as fast.
By that measure, CBO’s own analysis says the number has swung sharply over just the past two years: from 2 percent in 2024, up to 15 percent by November 2025, and back down to 10 percent as of the data cutoff in its most recent analysis. Those are CBO’s own published estimates, not a government-wide official rate, and the agency is explicit that “our tariff projections continue to be uncertain.”
Free retirement updates: Miss an enrollment or claim deadline and it may be gone. Our free Retirement Shield newsletter keeps readers ahead of the ones that matter. Get the free newsletter.
Why the rate fell instead of rising again
The drop traces directly to a legal decision, not a policy retreat. CBO’s timeline notes that on February 20, 2026, the Supreme Court ruled the administration could not impose tariffs under the International Emergency Economic Powers Act, and the administration began terminating and refunding those tariffs shortly after. A temporary, across-the-board 10 percent tariff imposed under a different statute in late February also expired on July 24, 2026. In its place, on that same date, the Trade Representative imposed the 10 to 12.5 percent Section 301 tariffs on 60 economies described in a separate Federal Register memorandum. Those new tariffs are real and still collecting revenue, but CBO’s analysis finds they raise less money in aggregate than the IEEPA tariffs they replaced, which is what pulled the blended average rate down even as specific product categories kept a tariff attached.
The revenue side tells the same story
The scale of the shift shows up clearly in customs collections. CBO’s Monthly Budget Review reports that net customs revenue for fiscal year 2026 is now projected to run about $250 billion below what the agency projected back in February, and that roughly half of that swing comes from refunding the $166 billion collected under the now-invalidated IEEPA authority. On the deficit side, CBO projects that trade-policy changes through July 31 leave total deficits $0.9 trillion larger over the 2027-through-2036 period than its February baseline assumed, split between $0.7 trillion in larger primary deficits and $0.2 trillion in added debt-service costs. A lower effective tariff rate, in other words, is not free; it shows up as a wider federal deficit projection rather than as pure savings.
Why a lower average doesn’t mean lower prices everywhere
A 10 percent economy-wide average sits comfortably below the specific rates households are actually seeing on individual goods this fall, from the 12.5 percent tariff now applied to dozens of trading partners to the far higher rates layered onto particular Canadian and drone-related imports elsewhere in the current tariff landscape. That gap is not a contradiction; it reflects how an import-weighted average smooths out categories where tariffs did not change or were removed entirely against categories where they went up sharply. A household that buys heavily from a country or product category still carrying an elevated rate will not feel like they are paying “10 percent,” even though that is the figure describing the system as a whole.
What could move the number again
CBO is candid that its own estimate could shift again quickly. The agency notes its projections do not yet include the effects of “announced policy changes not in effect as of July 31,” specifically flagging potential changes to tariffs on certain imports from Canada as one live example, and it warns that the administration “frequently changes tariff policies.” Because the ETR is recalculated each time CBO updates its analysis, and because it is built on 2024 import patterns rather than real-time trade flows, the 10 percent figure is best read as a snapshot of policy as of late July, not a fixed number households can expect to hold through the rest of the year.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
More Financial Reading
