The effective tariff rate on U.S. imports will settle near 22 per cent and duties on sensitive sectors critical to national security are unlikely to be lifted, JPMorgan Chase’s Center for Geopolitics wrote in a report on Wednesday.

Tariffs are being viewed across party lines as vital to enhancing the U.S. industrial base in strategic sectors such as semiconductors and defense, making a rollback unlikely even after U.S. President Donald Trump’s term, the report said.

While much of the market optimism has stemmed from the belief that tariffs are primarily a political bargaining tool, the report hints at a more nuanced trade landscape.

Recent trade deals have fueled hopes that the White House may eventually soften its stance, but the report said expectations of a return to pre-Trump policies may be misplaced.

“It would be a mistake to assume that the United States returns to an era of low tariffs and the pursuit of comprehensive free trade agreements,” the report said.

“Even if the next U.S. president supports a pre-2017 approach to trade policy, they would face a number of challenges to unwinding the Trump administration’s tariff structure.”

As more times passes, companies might also recalibrate their investments accordingly, reducing the chances of going back to the previous trade regime.

JPMorgan launched the Center for Geopolitics in May to help businesses navigate disruptions from global instability and other economic challenges. It is led by Derek Chollet, who has served in the Pentagon, the State Department, the White House and Congress.

A report last month by the JPMorganChase Institute estimated that the implementation of full universal tariffs announced on April 2 could add up to $187.7 billion in direct import costs for midsize companies, more than six times the cost of earlier tariffs in place at the start of 2025.

(Reporting by Niket Nishant in Bengaluru and Nupur Anand in New York; Editing by Arun Koyyur)