Research: Most Americans believe tariffs will worsen personal finances

The first was historic inflation and interest rates rising. Then came the aggressive tariffs, the fear of a recession, market volatility, and the Tart trade war. For years, Americans have felt bad about the US economy. And new data from Bankrate suggests that many people are not feeling well even after electing a new government to heal from higher prices.

According to Bankrate’s new consumer sentiment survey, over half (56%) of Americans say they think the US economy is heading in the wrong direction. This is virtually unchanged from a similar fundraising poll released before the November 2024 presidential election, when 55% felt the economy was on the wrong track.

Moreover, most Americans do not seem to support Trump’s signature bailout for the economy: increased tariffs. Of the policies proposed or advanced by the Trump administration, Americans are the most downbeat of rising import taxes on foreign and imported goods. Two-thirds (or 65%) believe that tariffs will worsen individual finances, while 41% believe that they will “greatly” damage their money.

Inflation has slowed, and borrowing costs have also been declining since Trump’s election. Meanwhile, President Donald Trump is in a hurry to make his first term tax cuts permanent before it expires at the end of the year. This is a move that will help prevent Americans from experiencing even more sticker shocks with their purchasing power. But it’s tariffs that mask the bright spots of the US economy. Economists say it is increasing the risk of both inflation and recession.

Trump has moved even faster with tariffs than he had in his first term. He slapped tariffs on steel and aluminum imports, not only automobiles and auto parts, but also steel and aluminum imports, and announced a universal baseline 10% tariff in all countries that shocked the world even further during the announcement of the “liberation day” tariffs in early April.

Many of these toughest tariff hikes now face legal challenges. Still, the current US tariff rates are at the highest in almost a century, with Yale Budget Lab estimates that an average US consumer costs an additional $2,500 a year. Those are costs that few Americans have room to absorb into their budgets, even before post-pandemic inflation. Since 2019, only two in five Americans have told Bankrate that they will be paying $1,000 in their savings.

Bankrate Insights into American Economic Attitudes

This is someone who thinks the US economy is heading in the wrong direction.

Although most Americans believe that the US economy is on the wrong track since the 2024 presidential election, the share of Americans who say the US economy is heading in the right direction has fallen.

Another 17% in Bankrate’s latest survey say they don’t know what direction the US economy is generally heading.

How Americans feel about the state of the US economy depends heavily on their political ideology. Republicans are the only group in the Bankrate survey, and are likely to believe that the US economy is heading in the right direction at 58%, with 17% of independents and 7% of Democrats heading in the right direction.

Meanwhile, most Democrats (83%) believe the economy is heading in the wrong direction, compared to 58% of independents and 27% of Republicans.

It is not uncommon for Americans to feel more optimistic when the party controls the federal government. In October, 83% of Republicans thought the US economy was on the wrong track, in contrast to 27% of Democrats and 62% of independents.

“Partistism is a powerful drug,” says Layna Mosley, a professor of politics and international affairs at Princeton University, who specializes in trade policy. “If you identify as a Democrat and a Democrat, if it’s said to be a good policy, a lot of people tend to believe it.”

Regarding other groups, men (31%) may be slightly higher than women (24%), and may believe that the economy is heading in the right direction. However, both groups feel less optimistic than previous polls at Bankrate when 37% of men and 28% of women believed the economy was on the right track.

Young people, meanwhile, are much lower about the US economy than Bankrate’s previous consumer sentiment polls, while older generations are not pessimistic.

Americans say the US economy is on the wrong track by generation:

Americans are the most downbeat on Trump’s tariff policy

Tariffs have emerged as the main perpetrator for certain reasons why Americans disrespect the US economy.

Of all the policies proposed or implemented by the Trump administration, Americans were most concerned about tariffs. Over two-thirds (or 65%) of Americans said increased tariffs on foreign and imported goods would worsen personal finances, while only 18% said they would improve their finances. Another 10% said they didn’t know what the impact was, while 7% said they wouldn’t have an impact on tariffs.

All the groups surveyed were more likely to say that these policies would worsen the finances rather than improve the finances. That was even the whole party line. Nine out of 10 (91%) Democrats say tariffs have a negative impact on their personal finances, compared to 62% of independents and 46% of Republicans. Meanwhile, 5% of Democrats say tariffs improve their finances compared to 36% of Republicans and 13% of independents.

Inflation is a major motivation for voting behaviour, according to a study by Jesse Rhodes, a political science professor at the University of Massachusetts Amherst University, which supports the institution’s UMASS polls. But that may not beat political beliefs, he says. Even in his own work, he has seen Republican-leaning respondents acknowledge that prices could rise due to fees. However, it is also likely that Republicans believe that these duties will successfully revive the manufacturing sector and restore middle class jobs. This is an important goal of Trump’s protectionist trade agenda.

Beyond generations, ZERS (65%), Millennials (69%), and Baby Boomers (68%) were pretty much consistent with tariffs harming their wallets. Gen Xers (25%) were more likely than other age groups to expect tariffs to improve their finances, but 60% still believed that tariffs would be harmful to their finances.

Middle-income earners earning between $75,000 and $99,999 were most likely to think that tariffs below $50,000 (65%) per year (65%), but 70% would be the most likely to think that it would harm your finances. Meanwhile, 59% of Americans making between $50,000 and $74,999 say tariffs are harmful to their finances.

How Americans feel about other policy measures in the Trump administration

Among the other stances of the Trump administration, Americans are most likely to expect the president to gain more control over the historically independent Federal Reserve, cut taxes for the wealthy, and reduce the federal workforce.

Meanwhile, Americans appeared to support reducing taxes on small businesses, limiting credit card interest rates, and eliminating federal income taxes on social security.

How Americans feel that Trump administration’s policy priorities could affect their finances

Both Republicans and Democrats have received roughly the same amount of support for the expansion of the Child Tax Credit (CTC), with 40% of Democrats and 38% of Republicans saying the initiative will improve their finances. The same applies to limiting credit card interest rates, supported by 55% of Democrats and 53% of Republicans.

But Republicans are very likely to say that illegally expel workers living in the US, reduce the size of the federal workforce and give Fed more control than Democrats will improve their finances.

Almost half of ZERS and millennials (47% and 45% respectively) are compared to 34% of XERS and 19% of Baby Boomers when generous student loan debt improves their finances.

Where Americans are aware of higher inflation

Tariffs are threatening to raise prices when many Americans are still being sticker shocked by post-pandemic inflation. Almost all Americans (97%) say they have noticed higher prices than they’ve used to in the past year.

More Americans are aware of inflation today, more people are aware of it than when price pressures were approaching a 40-year high. More than nine in 10 Americans (93%) said in March 2022 they noticed a higher price to the Bank Rate than they were used to. Meanwhile, 89% said the same thing in their votes starting in August 2021.

According to the latest data from the Consumer Price Index (CPI), it is correct to see higher costs.

However, inflation is also expected in the healthiest economies. Federal Reserve policymakers usually prefer prices to rise by 2% each year. This is thought to be the less-hot, less-squeaky “Goldilock” pace that gives the US economy momentum to expand without robbing Americans of their purchasing power.

Another question is whether tariffs can be blamed for the price increase that consumers are aware of. Rising product prices, including home furniture, apparel and computers, caught the eye of Fed Chairman Jerome Powell at the Federal Reserve March pricing meeting. The central bank chief said tariffs are likely to be liable, but he also said the full tariff impact may not be visible for months.

Regarding certain places Americans say they are aware of inflation, this includes:

• Grocery (91%);
• Eating out (75%);
• Gasoline (59%);
• Consumer products (52%);
• Automotive/Automobile Services (47%);
• Travel (40%);
• Home Services (39%);
• Personal Care Services (39%); and
• Other (4%).

“Food and energy are one of the most price-sensitive categories that Americans are most price-sensitive, as this represents what we inevitably have to buy,” Hamrick said. “The challenge for the Federal Reserve was to lower inflation to a 2% target without keeping interest rates high enough to cause a recession.”

Are you worried about the state of the US economy? Perform these three steps

Americans have been forced to endure a massive amount of volatility this year, whether it’s the odds of financial market investments, Trump’s volatile, suspended tariff policies, or repeated recession. Currently, economists have curbed the chance of a slump at 36% by March 2026, but experts say it depends on the rise in tariffs and how long the stay will last.

Whether you’re worried about a higher price, a recession, or both, finance experts say there’s nothing more to help ease your mind than coming up with a game plan.

“The economic cycle, including expansion and recession, is an inevitable aspect of life,” Hamrick said. “Using high-yield accounts of liquids and having enough savings is one good way to protect yourself when it’s thick and thin.”

Bankrate has asked SSRS (May 2025) and YouGov PLC (October 2024) to conduct each survey. Both responses were collected primarily from online surveys.