A year ago, Kimberly Clausing, the Eric M. Zolt Chair in Tax Law and Policy at UCLA School of Law, sat down with us to explain what tariffs are, how they work, and why their broad use was cause for concern. Since then, the trade landscape has shifted dramatically — with sweeping new tariffs, a landmark Supreme Court ruling, and mounting evidence of economic fallout.

We caught up with Clausing to find out what a year of data tells us about who has actually paid the price, whether the administration’s goals have been met, and where U.S. trade policy goes from here.

A lot has happened since we last spoke about tariffs a year ago. Where do things stand now?

In February 2026, the Supreme Court ruled that most of the president’s 2025 tariffs —those levied under the authority of the International Emergency Economic Powers Act (IEEPA) — were unlawful. The Trump administration immediately pivoted to utilizing other authorities to levy similarly high tariffs on trading partners, and there are presently court challenges around these new tariffs.

Last time we spoke, you warned that tariffs function as a regressive tax that falls hardest on lower- and middle-income households. Now that we have a year of data, what does the evidence show about who has actually borne the cost?

The preponderance of evidence indicates that the tariffs are being fully, or nearly fully, “passed through” to U.S. buyers of imports — this tax is being borne by Americans. Firms have experienced some of the burden through lower profit margins, but a substantial share is being passed on to U.S. consumers in the form of higher prices. This has contributed to the affordability concerns affecting many U.S. households.

The administration has framed tariffs as a tool for restoring manufacturing and reducing the trade deficit. Have either of those goals been achieved?

No. While the trade deficit has been modestly reduced, the current account deficit — a broader measure — in 2025 was very similar to that in 2024.

Perhaps more important, manufacturing employment, along with other blue-collar jobs, has fallen steadily since the tariffs came into place. This is to some extent unsurprising, as higher imported input costs have harmed the competitiveness of U.S. manufacturing.

The Supreme Court's IEEPA ruling was a major legal development. What does it mean for how future administrations can use tariffs, and does it meaningfully constrain what's happening now?

The Supreme Court’s ruling was an important decision for the rule of law and the separation of powers. Article 1, Section 8 of the U.S. Constitution gives the power to tax to Congress, not the president. The Trump administration’s broad tariffs were not consistent with the authorities they invoked. How the courts will read the new tariffs remains an open question, and the U.S. Court of International Trade has expressed some bewilderment at the current tariff authorities being employed, but the situation is still evolving.

Given everything we've covered, what does the next chapter look like for U.S. and global trade? What should we be watching for?

One encouraging development is other countries’ reactions to the Trump administration’s embrace of protectionism. While many governments have had no choice but to placate the Trump administration’s demands through bilateral negotiations, we have not seen a broader escalation of protectionist measures among other countries. On the contrary, countries are reaching out to further liberalize trade among themselves, in part to insulate themselves from U.S. protectionism.