Gita Gopinath says US tariffs have acted like a tax on domestic consumers, with no visible gains in trade or manufacturing

WASHINGTON: Former IMF Chief Economist Gita Gopinath has said that six months after the implementation of the so-called ‘Liberation Day’ tariffs, the United States has seen limited benefits, with the measures largely burdening domestic firms and consumers.

In a post on X, Gopinath said that the tariffs have substantially increased government revenue but have effectively served as a tax on US companies and consumers. “Raise revenue for the government? Yes. Quite substantially. Borne almost entirely by US firms and passed on some to US consumers”, she noted.

However, she pointed out that the tariffs have also contributed to higher prices. “Raise inflation? Yes, by small amounts overall. More substantially for household appliances, furniture, coffee”, Gopinath said, suggesting that the duties have pushed up costs in several consumer categories.

It is 6 months since “Liberation day” tariffs. What have US tariffs accomplished?
1. Raise revenue for government? Yes. Quite substantially. Borne almost entirely by US firms and passed on some to US consumers. So it has worked like a tax on US firms/consumers.
2. Raise… pic.twitter.com/KZG3UgKB3S

— Gita Gopinath (@GitaGopinath) October 6, 2025

Despite these effects, Gopinath stated that there is “no sign yet” of improvement in either the US trade balance or manufacturing sector, two key objectives the tariffs were expected to support. Summing up her assessment, she said the overall “score card is negative” indicating that the policy has so far failed to deliver on its broader economic promises while adding to inflationary pressures and costs for American businesses.

US President Donald Trump imposed 25 per cent tariff on India in July and later imposed 25 per cent secondary tariff which came into effect on August 27.

Later, on September 26, United States President Donald Trump also announced that his administration will impose a 100 per cent tariff on branded and patented pharmaceutical products beginning October 1, 2025, unless the manufacturing companies establish production facilities in the United States.

However, as per a latest report by the World Bank, India is expected to remain the world’s fastest-growing major economy, driven by strong consumption, improved farm output, and rising rural wages, according to the World Bank’s latest South Asia Development Update. (ANI)