As we try to get our bearings after the “liberation day” tariffs announced last week, it can be helpful to add in some historical context.

To this end, the team at Yale’s Budget Lab has modeled the effect of recent U.S. tariff announcements and published comparable data all the way back to 1790 (see the chart below).

They found that the average effective U.S. tariff rate after incorporating all 2025 tariffs is now 22.4%— the highest since 1909 and much higher than the average of 1.8% set over the 2000-2024 period.

This highlights just how different Trump’s trade policy is from the prevailing norm. The last time U.S. tariffs were this high, indoor plumbing was a luxury, Germany had an emperor and President Trump’s mom wasn’t born.

The Budget Lab also calculated that the 2025 tariffs will raise prices in the U.S. by 2.3% in the short-run or about $3,800 per household.

One argument is that this negative impact on U.S. consumers (not to mention financial markets and the overall economy) will—sooner or later—lead to a change of heart on the part of the President.

This argument, however, must contend with statements from the President that the economic pain is necessary ("sometimes you have to take medicine to fix something") and worth it because it will make the U.S. “wealthy like never before.”

Canada is currently facing a lower average effective tariff rate due to exemptions under the Canada-U.S.-Mexico Agreement (our estimate is around 4% assuming most goods are CUSMA compliant). The overall height of the current U.S. tariff wall has, however, increased U.S. recession risks that, on top of the direct impact of outstanding U.S. tariffs on Canadian goods, would negatively affect the Canadian economy.

Answer to the previous trivia question: Autarky is the term for a country that seeks self-sufficiency.

Today’s trivia question: Who was the German Emperor in 1909 when the effective U.S. tariff rate was 23% (versus 22.4% at the moment)?