👁 Import Surges and Tariff Avoidance: The Short-Term Impact of the Trump Administration’s Trade Policies

Import Surges and Tariff Avoidance: The Short-Term Impact of the Trump Administration’s Trade Policies

Import Surges and Tariff Avoidance: The Short-Term Impact of the Trump Administration’s Trade Policies We estimate that importers avoided 13.1 percent ($6.5 billion) of new tariffs by accelerating purchases and changing their purchasing patterns in response to the new tariff regime. Importers especially stockpiled pharmaceuticals and precious metals during 2025 Q1.We estimate that importers avoided 13.1 percent ($6.5 billion) of new tariffs by accelerating purchases and changing their purchasing patterns in response to the new tariff regime. Importers especially stockpiled pharmaceuticals and precious metals during 2025 Q1.2025-07-14T00:00:00.000Z
Import Surges and Tariff Avoidance: The Short-Term Impact of the Trump Administration’s Trade Policies

We estimate that importers avoided 13.1 percent ($6.5 billion) of new tariffs by accelerating purchases and changing their purchasing patterns in response to the new tariff regime. Importers especially stockpiled pharmaceuticals and precious metals during 2025 Q1.


Key Points

  • U.S. import volumes dramatically increased in Q1 2025 as importers stocked up on goods to avoid tariffs, with aggregate import values exceeding historical trends by 26 percent. This pattern reversed in April and May as aggregate import values returned to levels consistent with historical trends.

  • Dramatic import surges were particularly evident in early 2025 from Ireland and Switzerland as importers stockpiled pharmaceuticals and precious metals.

  • We estimate that the new tariffs raised $42.7 billion in revenue between October 2024 and May 2025 relative to a counterfactual projection with no change in tariff rates.

  • Importers have avoided $6.5 billion in tariffs, equivalent to 13.1 percent of new revenue, by accelerating purchases and changing their purchasing patterns in response to the new tariff regime.


Note: This brief has been revised on July 22, 2025 to correct an earlier data issue.
Introduction

The U.S. International Trade Commission recently released detailed trade and tariff data through May 2025. This data allows us to provide an initial assessment of the impact of the Trump administration’s tariffs on U.S. imports and customs revenue and to examine how import behavior has changed in response to the new tariff regime. While this analysis is a retrospective examination of the impact of tariffs through May 2025, PWBM also provides a tariff simulator that can be used to forecast the impact of tariffs on U.S. imports and customs revenue.

Background
Imports Surged in Anticipation of Tariffs and Fell After Implementation
Figure 1 illustrates the surge in U.S. import values that began in late 2024. In the first quarter of 2025, imports were 26 percent higher than historical trends would suggest. By April, the surge largely receded, with imports falling 17.5 percent month-over-month and returning to trend. May data confirms that imports have reverted to historical levels, declining 3.7 percent from April.

Figure 1: Monthly Import Volumes (2022-2025)

Notes: The blue line shows the trend estimated from data prior to Q4 2024 (i.e., data to the left of the dashed line). Black points represent seasonally adjusted values. The grey band represents the 95% prediction interval.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

Higher Tariffs Increased Customs Revenue

The import surge receded as the Trump administration’s tariff policies went into effect, suggesting that importers were stockpiling goods to avoid new tariffs.1 As shown in Figure 2, the overall effective tariff rate rose to 8.8 percent in May, up from just 2.2 percent in January.2

Among major trading partners, China has seen the largest tariff increase, with May imports facing an effective rate of 47.8 percent. At the product level, steel and aluminum products and automotive vehicles were the most heavily tariffed products, with effective rates reaching 26.9 percent and 18.8 percent in May.

Figure 2: Effective Tariff Rates on Key Trading Partner and Product Category

Click on the tabs above to switch between scenarios.

by Major Trading Partner

by Selected Product Category

Note: The effective tariff rate is computed as the value of customs duties as a percentage of the value of imports.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

Higher tariff rates have produced a significant rise in customs revenue so far in 2025. PWBM’s Real-Time Federal Budget Tracker shows that between January 1 and July 10, 2025, the U.S. collected $52 billion more in customs duties than over the same period in 2024, an increase of about 111 percent.3

Figure 3: Customs Duties and Related Taxes

Note: Each line shows cumulative customs duties for the year as of the given date. Values for 2022 and 2023 are adjusted for inflation.
Source: Penn Wharton Budget Model based on data from U.S. Department of the Treasury, Daily Treasury Statement.

Chinese Import Substitution, Swiss Bullion, and Irish Pharmaceuticals: Import Surges by Country and Product Category

The surge in imports during the first quarter of 2025 was not evenly distributed across countries or product categories. Below, we examine trade data at the country and product levels to identify how trade patterns have changed in response to the new tariff regime.

Import Responses Across Countries

To quantify how imports from individual countries have responded, we define a country-level import surge as the percentage difference between a country’s actual imports and its projected historical trend. In Figure 4, we plot this surge percentage for the period between October 2024 and May 2025 against a country’s historical share of U.S. imports, for all trading partners with an import share of at least 1 percent. This measure captures anticipatory imports that may have started after the 2024 presidential election through the most recent monthly data release by the USITC.

Figure 4: Import Surge by Country (Oct 2024-May 2025)

Notes: The x-axis represents the historical import share of the given country as a share of total U.S. imports, and the y-axis represents the percent change in imports relative to what would be expected from historical trends.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

Figure 4 reveals significant geographical heterogeneity in the import response to the new administration’s tariff policy. In Figure 5, we focus on the dynamic responses of three sets of trading partners. The first row of Panel A shows the response of imports from the most important North American trading partners, Canada and Mexico. The second row shows the response for the two European countries with the largest response, Ireland and Switzerland. The third row shows the response for China, the most important Asian trade partner, and a set of countries in Southeast Asia, including the ASEAN countries and Taiwan.

Figure 5: Monthly Imports Relative to Trend by Country and Region

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Rest of World

Notes: The blue line shows the trend estimated from data prior to Q4 2024 (i.e., data to the left of the dashed line). Black points represent seasonally adjusted values. The grey band represents the prediction interval. Association of Southeast Asian Nations(ASEAN) is an intergovernmental organization comprising ten Southeast Asian countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

Among the biggest U.S. trading partners, Canada experienced a large initial surge in imports that receded in March and fell below trend in April and May. In contrast, Mexican imports have not deviated significantly from trend.

In Europe, Switzerland and Ireland stand out as extreme outliers across the global distribution of import responses. Between October 2024 and May 2025, Switzerland’s imports were more than 200 percent larger than trend, while Irish imports were 69 percent higher than normal. Figure A1 in the appendix shows how imports grew at the product level for each of these countries. The Swiss import surge was driven by imports of precious metals—Switzerland is a major hub for gold bullion, which traders started importing en masse in December as a precaution against potential tariffs on gold.4 Ireland, a major pharmaceutical hub, saw a similar anticipatory spike in pharmaceutical imports. A large percentage of Irish imports have consisted of blockbuster weight loss drugs. Similar to Switzerland, Irish imports have fallen back to trend in April, but pharmaceutical products may soon face new tariffs following the conclusion of an ongoing Section 232 investigation that could lead to high taxes on such imports in the future.5 The large import response of gold and pharmaceutical products indicates that anticipatory tariff avoidance may be easier for high-value goods that can be transported and stored at a relatively low cost.

In Asia, China experienced a large initial import surge around the election that peaked in December and January, suggesting that importers correctly anticipated large tariff increases on Chinese goods. Around the same time, imports from Southeast Asian countries began to accelerate, consistent with substitution and transshipment of imports through neighboring countries. Taiwan’s surge appears driven by anticipatory imports of machinery and electronics equipment, reflecting efforts to secure supply chains ahead of potential semiconductor tariffs, as shown in Figure A1.

Although we have focused on the dynamic responses of a few countries, Panel B of Figure 5 shows the aggregate dynamic response for other U.S. trading partners, demonstrating that the import surge in early 2025 was a global phenomenon.

Potential Section 232 Targets: Autos, Pharmaceuticals, Semiconductors, and Steel and Aluminum

The second Trump administration has used two major authorities to implement its tariff policies: Section 232 of the Trade Expansion Act and the International Emergency Economic Powers Act (IEEPA).

Tariffs imposed under IEEPA have targeted broad sets of products for different countries.6 Section 232, in contrast, has been used to impose tariffs on specific types of imports. During the first Trump administration, tariffs imposed under Section 232 targeted steel and aluminum imports. These tariffs continued under the Biden administration. In 2025, the same authority has been used to impose higher steel and aluminum tariffs as well as tariffs on automobiles and auto parts. More recently, the administration has launched Section 232 investigations that could lead to tariffs on other products, including pharmaceuticals and semiconductors.

Figure 6 shows how imports responded to potential tariffs on product categories that have either previously been targeted or are subject to investigation under Section 232. Imports across these categories have not reacted uniformly to the new tariff regime. There are evident import surges in auto parts, pharmaceuticals, semiconductors, and steel and aluminum. However, finished vehicle imports have declined relative to historical trends, although this decline appears to have started in mid-2024.

Figure 6: Monthly Import Values of Section 232 Targeted Products with Seasonal Adjustment (2022-2025)

Notes: The blue line shows the trend estimated from data prior to Q4 2024 (i.e., data to the left of the dashed line). Black points represent seasonally adjusted values. The grey band represents the prediction interval.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

How Did Changes in Import Behavior Affect Customs Revenue?

As shown in Figure 3, customs revenue has increased substantially since the start of the Trump administration as a result of higher tariffs. The timing of the import surge, however, largely preceded the major tariff increases to date.

In Figure 7, we examine how much tariff revenue would have been collected if importers had not accelerated purchases or changed their purchasing patterns—this is the “mechanical” revenue effect of the tariff rate increase, shown in red. Between October and December 2024, this effect is small as effective tariff rates did not materially change. In January 2025, this effect began to grow as some Biden-era tariff increases came into force, and then accelerated between February and May as the Trump administration’s tariffs took effect. In total, we estimate that tariff revenue would have been $49.1 billion dollars over this period if importers had not accelerated purchases or changed their purchasing patterns.

In blue, we show the change in tariff revenue that we attribute to changes in import behavior, computed as the difference between actual tariff revenue and the mechanical revenue effect. Imports began to accelerate in late 2024, initially leading to tariff revenue slightly above what would have been expected given historical import trends. In recent months, this effect has turned negative, indicating that changes in import behavior have significantly reduced tariff revenue. In total, we estimate that shifts in purchasing patterns lowered tariff revenue by $6.5 billion dollars between October and May, equivalent to a 13.1 percent decrease relative to a baseline projection that assumes no changes in import behavior.

Overall, we estimate that tariff rate changes have raised $42.7 billion dollars in customs revenue between October 2024 and May 2025.

Figure 7: Decomposition of Tariff Revenue Changes

Notes: The mechanical revenue effect (in red) is the increase in tariff revenue that would have been collected if importers had not accelerated purchases or changed their purchasing patterns. The behavioral revenue effect (in blue) is the decrease in tariff revenue that was not collected due to changes in import behavior. The overall increase in tariff revenue (in black) is the sum of the mechanical and behavioral revenue effects.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.

Appendix

Table A1: Tariff Timeline

Date Policy Change
February 4 Initial 10% tariff on Chinese imports implemented under IEEPA, targeting fentanyl-related supply chains
March 3 Fentanyl tariff on China doubled to 20%
March 4 Implementation of 25% duties on Canada/Mexico imports under IEEPA
March 6 USMCA-compliant goods exempted from tariffs on Canada/Mexico
March 12 Expanded Section 232 tariffs of 25% imposed on broader range of steel, aluminum and derivative products, removing previous country-specific exemptions
April 2 Reciprocal tariffs with country-specific rates announced
April 3 Section 232 automobile tariffs of 25% take effect on imported vehicles
April 5 Initial implementation of 10% baseline reciprocal tariff on most trading partners under IEEPA authority
April 8 Reciprocal tariff on China increased to 84%
April 9 Implementation of country-specific reciprocal tariff rates; modified same day with changes effective April 10, establishing a 10% minimum duty for a 90-day period on most trading partners, with China excluded from this modification; Reciprocal tariff on China raised to 125%—bringing the total tariff on applicable Chinese goods to 145% (when combined with the 20% fentanyl tariff)
April 10 10% minimum duty on most trading partners and 125% reciprocal tariff on China take effect
May 3 Section 232 tariffs of 25% take effect for auto parts
May 14 China’s combined tariff rate reduced from 145% to 30% (20% fentanyl + 10% reciprocal) for a 90-day pause, expected to return to 34% reciprocal rate after the pause, resulting in a 54% combined rate

Figure A1: Imported Products by Country

Notes: Product classification follows the major ‘Sections’ defined by the U.S. International Trade Commission.
Source: Penn Wharton Budget Model calculations based on data from U.S. International Trade Commission (USITC) DataWeb.



This analysis was produced by Wanling Luo, Lysle Boller, and Xiaoyue Sun. Mariko Paulson prepared the brief for the website.

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  1. Table A1 in the appendix provides a summary of the tariff policies implemented by the Trump administration through May 2025.  ↩

  2. We define the effective tariff rate as aggregate customs duties divided by aggregate import value.  ↩

  3. Customs duties in 2025 totaled $99.6 billion through July 10, compared to $47.2 billion over the same period in 2024.  ↩

  4. This precautionary behavior may have ultimately been unnecessary, as gold was formally exempted from the April 2 tariff announcement, after which the Swiss import surge subsided.  ↩

  5. On April 14, 2025, the Department of Commerce initiated a Section 232 investigation into pharmaceuticals and pharmaceutical ingredients, with the Federal Register notice published April 16. See “Notice of Request for Public Comments on Section 232 National Security Investigation of Imports of Pharmaceuticals and Pharmaceutical Ingredients,” 90 FR 15951 (April 16, 2025).  ↩

  6. IEEPA has been used to impose broad-based tariffs on China, Mexico, and Canada as well as “reciprocal” tariffs on a larger set of countries. IEEPA is also more uncertain given legal challenges that may hinder tariffs imposed under this authority in the future.  ↩

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