The Causal Effects of Tariff Uncertainty on Households' Macroeconomic Expectations and Spending Plans

According to the Budget Lab at Yale, the effective tariff rate in the US rose from around two percent in January 2025 to around 17 percent by November 2025, the highest tariff rate since 1935. This has renewed interest in how tariffs affect the macroeconomy. One important way in which policy changes, such as tariffs, affect the macroeconomy is via expectations. This paper studies the effects of consumers' beliefs about trade policy and, in particular, their assessments of how tariffs and uncertainty about tariffs affect their own macroeconomic expectations and their household's spending plans. Our survey-based RCT lets us generate exogenous and independent variation in households' tariff expectations and in the perceived uncertainty about future tariffs. Our design allows us to identify the causal effects of changes in the first and second moments of tariffs on consumers' macroeconomic expectations and spending plans. We do so by given to random subsets of households information about trade policy. First, we document that households that report being inattentive to news about tariffs respond significantly more to information treatments than households reporting paying attention to news about trade policy. Second, we show that our information treatments affect tariff beliefs and the levels and the uncertainty about future inflation, GDP growth, and the unemployment rate. Third, we use exogenous variation induced by information treatments to study how tariff expectations affect households' spending plans. Our main result is that higher tariff uncertainty, while holding the expected level of tariffs constant, strongly affects households' consumption attitudes. Additionally, we find that the level of tariff expectations is positively associated with households' readiness to spend on durable goods, indicating the importance of intertemporal substitution.