Customs officers processed roughly the same volume of imports in July 2026 as they did a year earlier, but the toll collected on every dollar of goods crossing the border looked nothing like it did when the current wave of tariffs began. According to the Penn Wharton Budget Model, the average effective tariff rate — the actual share of import value paid in customs duties — stood at 6.7 percent in July, nearly three times the 2.3 percent rate recorded in January 2025. For a household buying anything imported, from a washing machine to a set of tires, that gap is the difference between last year’s price tag and this year’s. The figure comes from newly released U.S. International Trade Commission data, not a projection or a political talking point.
How USITC Trade Data Becomes One Tariff Number
The 6.7 percent figure is not a tariff schedule or a tax bracket. It is a ratio: total customs duties collected by U.S. Customs and Border Protection, divided by the total value of goods that crossed the border, computed monthly from U.S. International Trade Commission DataWeb records and CBP trade statistics. That distinction matters, because a published tariff schedule can list rates far higher than what importers actually pay once exemptions, product-mix shifts and buyer substitution are factored in. Researchers describe the resulting figure as a “post-substitution” rate — what customs offices actually collected — as opposed to a “pre-substitution” estimate of what would have been collected had import patterns not shifted in response to higher posted rates.
The climb from the earlier baseline has been steep, if uneven. In January 2025, before the current tariff program began, the average effective rate measured 2.3 percent; Penn Wharton Budget Model’s September 9 update put the July 2026 figure at 6.7 percent. The rate has moved in fits and starts rather than climbing in a straight line, reflecting a year and a half of court rulings, tariff expirations and replacement programs layered one on top of another.
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A Court Ruling and Two Replacement Tariffs Shaped the July Reading
The path to 6.7 percent ran through a Supreme Court docket, not just a series of proclamations. The Court ruled on February 20, 2026, that tariffs imposed under the International Emergency Economic Powers Act were unconstitutional, which led to their repeal and replacement in March with a flat 10 percent global tariff imposed under Section 122 trade authority. That substitution is visible as a sharp drop in the aggregate rate around that period. The Section 122 tariff itself then expired on July 24, 2026, and was immediately replaced by new Section 301 tariffs of 10 or 12.5 percent on imports from 60 economies, with exemptions carved out for certain products.
Because the July data window captures only the first eight days under that new Section 301 structure, the 6.7 percent reading is best read as an early snapshot of a tariff regime that was still being phased in when the month closed. Whether the rate keeps climbing or levels off from here depends on how fully those Section 301 duties phase in and how importers respond — a forward-looking question Penn Wharton’s tariff simulator is built to model, separate from the backward-looking customs data behind the July number.
China and Metal Imports Carry the Heaviest Load
The 6.7 percent figure is an average, and averages hide enormous variation by country and product. China faced the highest effective rate among major trading partners in July, at 22.8 percent — down from earlier peaks in the tariff fight but still more than triple the economy-wide figure. Steel and aluminum imports fared worse than any single country’s goods: the effective rate on those products stood at 40.5 percent, a level tracing back to Section 232 tariffs that were roughly doubled in June 2025, from 25 percent to 50 percent. Automotive vehicles carried the next-highest rate among tracked categories, at 13 percent, reflecting a separate set of sector-specific duties layered on top of the general schedule.
For households, that unevenness means the real-world impact of the 6.7 percent average depends heavily on what they are buying. A family replacing a water heater made partly from imported steel, or shopping for a vehicle with imported components, is likely paying a duty burden well above the headline number; a family buying goods exempted or lightly tariffed is paying well below it.
Canadian and Mexican Imports Increasingly Dodge the Tariff Through USMCA
One of the clearest behavioral shifts in the data involves neighbors, not rivals. The share of import value from Canada and Mexico claiming a tariff exemption under the United States-Mexico-Canada Agreement held roughly steady for years before 2025, then rose sharply once broader tariff rates increased. By July 2026, 80.2 percent of import value from the two countries claimed a USMCA exemption, up from a stable baseline that predated the tariff increases. Importers are not defying the tariff schedule so much as routing around it, leaning on rules-of-origin provisions already written into the trade agreement to keep qualifying shipments duty-free.
That shift also explains part of why the effective rate on North American trade has stayed comparatively low even as global rates climbed: exemption claims, not tariff-free product categories alone, are doing much of the work of keeping duties off those particular shipments.
What the Higher Rate Has Meant for Customs Collections
The effective rate is not just a percentage on a chart; it eventually shows up as a dollar figure for the U.S. Treasury, one Penn Wharton tracks close to daily on its federal budget tracker. New tariffs generated an estimated $298.5 billion in gross customs revenue between January 2025 and July 2026, according to Penn Wharton Budget Model calculations built on USITC and CBP trade data. Had import patterns not shifted in response to the higher rates, the researchers estimate gross collections would have run $59.7 billion higher still — the gap between the “pre-substitution” and “post-substitution” rates that the same July data reveal.
That distinction between the sticker-price impact and the behavior-adjusted reality is why Penn Wharton frames the 6.7 percent July figure, up from 2.3 percent when the current tariff program began, as the most direct read of what actually changed at the border — a separate question from how already-collected duties eventually get refunded or redistributed.
Fixed Incomes and the Slow Cost of a Higher Tariff Rate
A tariff that adds a few points to the average cost of imported goods does not show up as a single line item on any receipt — it moves through prices for appliances, auto parts, clothing and dozens of other everyday categories over time. For a household on a fixed income, that steady drift is harder to absorb than it is for someone still earning wages, and no federal program adjusts specifically for tariff-driven cost increases. What often goes untracked is which existing benefit programs could still free up room elsewhere in a monthly budget.
The 69-page guide covers 11 benefit programs with the 2026 income limits and a 50-state phone directory for each one.
Look up the programs and income limits in The Benefits Checklist.
AI-assisted research and drafting; reviewed by an editor.
