NEW YORK, December 31, 2025, 07:31 ET
- The average effective U.S. tariff rate is now close to its highest level in decades as the year closes.
- Bank of America CEO Brian Moynihan says trade policy is “starting to de-escalate,” with tariffs settling around 15% for many countries.
- Businesses are looking for clearer rules on trade and labor as they set 2026 plans.
The average effective U.S. tariff rate has climbed to almost 17% as 2025 closes, up from around 2.5% a year ago, a level not seen since 1935. 1
That matters for consumers and companies heading into 2026 because tariffs function as import taxes, raising costs that can feed through to prices and squeeze margins.
It also matters to banks. Higher input costs and policy uncertainty can hit small-business cash flow, while shifting inflation expectations can influence the outlook for interest rates and credit.
Bank of America Chief Executive Brian Moynihan said in a CBS News interview that the administration’s tariff approach was “starting to de-escalate,” with many countries converging toward a 15% rate. “To go from a 10% across the board to 15% for the broad base of countries, not a huge impact,” Moynihan said. 2
Moynihan said higher tariff levels could still apply to countries that do not commit to buying more U.S. goods or lowering “non-tariff barriers,” a catch-all for trade obstacles such as quotas, licensing rules or local-content requirements.
He described China as a separate case, pointing to national security concerns tied to rare earths, magnets, batteries and artificial intelligence. He also flagged the U.S.-Mexico-Canada Agreement, or USMCA, as “a different case” ahead of its scheduled review.
For small businesses, Moynihan said tariffs and higher borrowing costs earlier in 2025 weighed on confidence, in part because many smaller firms borrow on floating-rate credit lines that move with interest rates.
He said the pressure point has shifted toward labor availability as immigration rules remain unsettled, a planning problem for firms that need dependable staffing to bid jobs and meet contracts.
Moynihan also pointed to still-firm consumer spending. He said Bank of America’s transaction data showed spending through late November and early December running up roughly 4% to 4.5% from a year earlier, with credit quality holding up, even as inflation remains an irritant for many households.
Some forecasters are less convinced tariffs will quickly retreat. Yahoo Finance reported U.S. tariff rates were set to end 2025 above 15%, and that experts do not expect them to come down much in 2026. 3
Bloomberg earlier reported Moynihan’s assessment that tariff policy is moving toward “de-escalation, not escalation,” and that Bank of America sees an average 15% tariff level for a broad base of countries, with higher rates for holdouts. 4
The direction of travel matters as much as the level. Even if headline tariff rates stabilize, companies will watch whether rules stay predictable enough to unlock hiring and investment plans that were postponed during bouts of trade-policy uncertainty.
