Study Reveals Americans Bear Majority of Tariff Costs
A recent analysis from the Federal Reserve Bank of New York reveals that the majority of tariff costs imposed by President Trump are being borne by American consumers and businesses. This report contradicts the President’s claims that foreign exporters are primarily responsible for these expenses.
Key Findings on Tariff Costs
According to the report, approximately 90% of the tariffs introduced by the Trump administration are impacting U.S. residents. The data illustrates a significant burden on domestic consumers, particularly from January to August 2025, where Americans shouldered an estimated 94% of tariff costs. However, this percentage slightly decreased to 92% in September and October, and further fell to 86% in November.
Assessment by the Congressional Budget Office
This analysis aligns with insights from the Congressional Budget Office (CBO). The CBO stated that elevated tariffs escalate the prices of imported goods, thus increasing costs for American households and businesses. Their findings suggest that only about 5% of tariff costs are absorbed by foreign exporters. In the short term, U.S. businesses are expected to absorb around 30% of the burdens through reduced profit margins. The remaining 70% is likely passed onto consumers in the form of higher prices.
International Perspectives on Tariff Impacts
- A study from a German research institute indicates a similar trend, estimating that 96% of the tariff burden is carried by U.S. consumers and importers.
- While some foreign suppliers may adjust prices downwards in reaction to tariffs, this response is not typical.
The Role of Tariffs in Economic Strategy
Tariffs have been a cornerstone of Trump’s economic policy, aimed at generating revenue, influencing foreign trade relationships, and encouraging domestic manufacturing. Despite claims to the contrary, evidence from various sources, including the New York Times, underscores that the tariff burden predominantly affects Americans.
In a January 30 op-ed in the Wall Street Journal, President Trump argued that the data supports his position—that the financial consequences of tariffs predominantly affect foreign producers and intermediaries. Nevertheless, the overwhelming evidence suggests that American consumers remain the key stakeholders in this economic strategy.
