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• The Richmond Fed's 'Scenario 2' economic model adds 25 percent tariffs on goods imported from Canada and Mexico that are not covered under the USMCA, resulting in an overall Average Effective Tariff Rate (AETR) increase from 7.1 percent to 10.4 percent.
• The Richmond Fed researchers estimate industry-level tariff impacts by aggregating tariffs using each product-country pair's share of total industry imports as weights, classifying industries according to the North American Industry Classification System (NAICS) at the three-digit level.
• The most aggressive tariff package simulated by the Richmond Fed includes a 25 percent tariff on EU imports, 20 percent on Chinese imports, 25 percent on steel and aluminum, 25 percent on non-USMCA goods from Canada and Mexico, and 25 percent on auto imports.
• Under the Richmond Fed's 'Scenario 3' tariff model, Mexico's Average Effective Tariff Rate (AETR) rises to 20.1 percent, Canada's AETR rises to 14.1 percent, and the European Union's AETR increases from 2.5 percent to 4.4 percent.
• Manufacturing and mining industries face the highest exposure under the proposed 2025 tariffs according to the Richmond Fed's AETR analysis.
• Under the Richmond Fed's 'Scenario 3' tariff model, China's Average Effective Tariff Rate (AETR) remains unchanged at 33.5 percent because automobiles from China were already subject to elevated tariffs under prior scenarios.
• The Richmond Fed's 'Scenario 3' economic model adds a 25 percent tariff on all motor vehicle imports, regardless of origin, which primarily targets products under Chapter 87 of the Harmonized Tariff Schedule (HTS).
• Under the Richmond Fed's 'Scenario 2' model, manufacturing industries including fabricated metals, electrical equipment, apparel, and furniture experience average tariff rates ranging between 10 percent and 15 percent.
• The Richmond Fed estimates that the overall cost increase for industries under 'Scenario 2' is smaller than the headline 20 percent tariff because these industries source a portion of their imports from countries unaffected by the tariff increases.
• Under the Richmond Fed's 'Scenario 3' model, the transportation equipment sector faces average tariff rates above 25 percent, reflecting the heavy dependence of U.S. auto manufacturing on imported parts and finished vehicles from Canada, Mexico, and the EU.
• Under the Richmond Fed's 'Scenario 2' tariff model, U.S. industries such as leather, apparel, and textile products face steep tariff increases due to their reliance on imports from China and USMCA partners in categories not covered by trade agreements.
• Sectors including oil and gas, petroleum and coal products, and agriculture-related goods like crops and forestry face lower average tariffs under the Richmond Fed's 'Scenario 2' model due to limited exposure to targeted trade flows or protection under existing trade agreements.
• The Richmond Fed's 'Scenario 3' model builds on 'Scenario 2' by adding a 25 percent tariff on all automobile imports, which significantly impacts sectors tied to the automotive supply chain.
• The Richmond Fed's 'Scenario 2' tariff model assumes a 20 percent increase on all imports from China, a 25 percent increase on all aluminum and steel imports, and a 25 percent tariff on non-USMCA goods from Canada and Mexico relative to the benchmark case.
• The Richmond Fed's 'Scenario 4' economic model introduces a 25 percent tariff on all imports from the European Union, causing the overall Average Effective Tariff Rate (AETR) to increase from 12.4 percent to 17.0 percent.