If you’ve spent any time on social media or watching the news lately, you’ve probably heard the same terrifying (or exciting, depending on who you ask) prophecy: a massive wall of taxes is coming for every single thing we buy from overseas. We aren't just talking about a few specialized parts anymore. We're talking about the "universal" plan. But the big question everyone is asking—will Trump actually do tariffs on the scale he's promised—is way more complicated than a simple yes or no.
Honestly, he’s already started.
As of January 2026, we aren't just speculating anymore. We are living in it. Since the second term began in January 2025, the U.S. has seen an aggressive, often chaotic rollout of import duties that has caught even some of his most loyal supporters off guard. The "Art of the Deal" strategy has shifted from the boardroom to the border, and the results are... well, they’re messy.
The Reality of the "Universal" Tariff
During the 2024 campaign, the big talk was a 10% to 20% across-the-board tariff on basically everything. People thought it was just "campaign talk." It wasn't. On April 2, 2025, the President signed an executive order that hit the "nuclear" button, invoking the International Emergency Economic Powers Act (IEEPA) to slap a 10% baseline tariff on most global imports.
But here is where it gets weird.
Instead of a flat, simple line, we ended up with a jigsaw puzzle. For some countries, it’s 10%. For others, like the "reciprocal" rates he’s constantly tweeting about, it’s climbed as high as 41%. If you're a business owner trying to source parts, your morning routine now involves checking a "Tariff Tracker" just to see if your costs doubled overnight.
China: The 60% Question
Everyone wants to know if the 60% tariff on China is real. Currently, it’s a bit of a moving target. While rates on Chinese goods surged throughout 2025, the "full 60%" has been used more as a heavy-duty club in negotiations.
- The Fentanyl Factor: In early 2025, a 10% "fentanyl tariff" was added specifically to pressure Beijing on drug precursor exports.
- The Truces: By November 2025, the administration actually cut some of these rates back after a series of "framework agreements."
- The De Minimis Loophole: One big win for the administration was finally closing the "de minimis" loophole, which previously allowed cheap packages (under $800) from sites like Temu or Shein to enter the U.S. duty-free. Now, those are getting hit with the same taxes as everything else.
Basically, the 60% is the threat he keeps in his back pocket. He uses it to get China to the table, then "generously" lowers it to 30% or 40% when they agree to buy more American corn or Boeing planes. It’s a game of chicken played with billions of dollars.
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What’s Happening at the Grocery Store?
If you feel like your wallet is lighter, you aren't imagining it. Economists at the Yale Budget Lab have been tracking this closely. They found that between 61% and 80% of these new 2025 tariffs were passed directly onto us—the consumers.
It’s not hitting everything at once. You might not notice it on a pack of gum, but you'll definitely see it on:
- Electronics: Laptops and phones are seeing "tariff surcharges" at checkout.
- Appliances: On June 12, 2025, tariffs were expanded to refrigerators and dishwashers.
- Beef and Coffee: These are the big ones. Prices for imported food staples have stayed stubbornly high, even as overall inflation leveled off in other sectors.
Goldman Sachs actually broke down who is paying the bill. It’s not just "foreigners" like the campaign ads say. Their data suggests about 40% is paid by U.S. consumers, 40% by U.S. businesses (who eat the cost to stay competitive), and only about 20% is actually absorbed by the foreign exporters.
The "Income Tax Replacement" Myth
One of the wildest claims we’ve heard is that tariff money will eventually replace federal income taxes.
Let’s be real: the math just doesn't work. The federal income tax brought in roughly $2.4 trillion in 2024. Even with all these new 2025 tariffs, the government is only projected to bring in about $260 billion a year from customs duties. You don't need a PhD in economics to see the gap. To actually replace income tax, you'd need tariffs so high (we’re talking 100% or more on everything) that trade would basically stop. If trade stops, there are no imports to tax. It’s a self-defeating cycle.
Is it Legal? The Supreme Court Showdown
This is the part nobody talks about, but it’s the most important thing happening right now.
In late 2025, a case called Learning Resources v. Trump made its way to the Supreme Court. The argument is simple: Does the President actually have the power to use "emergency" laws to bypass Congress and tax the whole world indefinitely?
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If the Court rules against the administration in early 2026, the entire tariff structure could collapse. We could see a massive wave of "Tariff Refunds" where companies like Costco (which has already filed massive refund claims) get billions back from the Treasury. But for now, the taxes remain in place because the Court hasn't issued a stay.
The "Manufacturing Miracle" vs. Reality
The whole point of this, according to the White House, is to bring jobs back. "Make it here, and you don't pay the tax."
It sounds great. But in practice? It’s complicated. On November 1, 2025, the administration hit imported trucks and vehicle parts with a 25% duty. The hope was to force companies to build more plants in the Midwest. Instead, what we saw in the December 2025 jobs report was a weakening labor market.
Why? Because manufacturing today is global. An "American" truck often uses specialized parts from 20 different countries. When those parts get 25% more expensive, the U.S. factory actually becomes less profitable, not more. Some companies have even frozen hiring because they can’t predict what the rules will be next month.
How Businesses are Surviving
If you’re running a business, you aren't just sitting around waiting for the Supreme Court. You're "tariff engineering."
- Country of Origin Shifting: Moving production from China to Vietnam (though the administration is now looking at "transshipment" penalties for this).
- Classification Hacks: Arguing that a "smartwatch" is a data device rather than a "watch" to fit into a lower-tax category.
- Customs Bonds: Companies are having to set aside way more cash just to cover the potential duties at the port.
What You Should Actually Do Now
The "will he or won't he" phase is over. He did. And he likely will continue to use them as his primary tool for foreign policy. Here’s how to handle the "Tariff Age" of 2026:
1. Front-load major purchases: If you know you need a new car or a kitchen remodel, don't wait. The supply of "exempt" goods from 2024 is drying up, and 2026 inventory will almost certainly reflect the full tariff price.
2. Watch the Supreme Court: The ruling on IEEPA authority (likely coming by Spring 2026) is the single biggest "buy" or "sell" signal for the economy. If the tariffs are struck down, expect a temporary dip in prices as companies clear out "taxed" inventory.
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3. Check the label, but don't assume: "Made in USA" is great, but remember that those companies often use imported raw materials (like copper, which got a 50% tariff in August 2025). Domestic prices are rising right alongside import prices.
4. Diversify your investments: Consumer discretionary stocks (retail, tech, autos) are the most vulnerable. Look toward sectors that are either exempt or protected, like certain energy niches or service-based industries that don't rely on physical shipping.
The era of cheap, frictionless global trade is on life support. Whether these tariffs "work" to bring back the 1950s manufacturing boom is still a heated debate, but one thing is certain: the era of the "tax-free" Amazon box is officially dead.
Next Steps for Your Business or Portfolio:
You should audit your supply chain for any "Chapter 72 or 73" HTS classifications immediately, as steel and aluminum derivatives are facing the strictest enforcement this quarter. Additionally, keep an eye on the February 2026 expiration of solar cell safeguards, which will determine if renewable energy costs take another leap upward.