Dive Brief:
- U.S. companies and consumers last year shouldered nearly 90% of the costs from tariffs imposed beginning in April 2025, Federal Reserve Bank of New York researchers said Thursday, countering a claim by the Trump administration that foreigners bear the burden from the import taxes.
- Tariffs imposed in April on so-called “Liberation Day” and beyond pushed up the average tariff rate from 2.6% to 13% by the end of 2025, the New York Fed researchers said in a report. Import prices for goods subject to the average tariff likely rose 11% more than the prices for untaxed goods, prompting companies to alter supply chains, they said.
- “U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025,” the New York Fed researchers said.
Dive Insight:
President Donald Trump for months has said that foreigners, rather than U.S. companies and consumers, pay the tariffs, thereby improving the nation’s fiscal outlook and the financial well-being of working Americans.
Yet the New York Fed said that two studies in addition to its own show that the highest cost falls on the U.S. rather than on foreign exporters.
The Kiel Institute, a Germany-based think tank, said in a report last month that U.S. importers and consumers bear 96% of the costs from tariffs imposed since April.
Trump administration tariffs generated roughly $200 billion in revenue in 2025 yet only 4% of the tax came from outside U.S. borders, the Kiel Institute said.
The Trump tariffs acted like a consumption tax on imports, reducing the variety and volume of goods available to consumers, according to the institute.
The import duties, on average, increased taxes on a U.S. household by $1,000 last year, the Tax Foundation said in a Jan. 6 report, and the burden will rise this year to $1,300.
The Yale Budget Lab last month reported a similar finding: Under Trump’s tariff regime, prices will rise 1.3% over the short term, imposing a $1,751 loss for the average U.S. household. The current 16.9% average tariff rate is the highest import tax since 1932.
The import duties will slow U.S. gross domestic product growth by 0.4 percentage points this year, and hold back the economic expansion by 0.3%, or the equivalent of $100 billion annually in 2025 dollars, the Yale Budget Lab said.
Also, tariffs will push up unemployment by 0.6 percentage points by the end of this year, reducing payrolls by 1.3 million at the end of 2025.
Trump’s tariffs are part of an administration effort to revive domestic manufacturing that will probably reduce the U.S. share of global commerce and may weaken the influence of Washington over U.S. trade partners.
“The U.S.’s share in the value of global trade of goods is projected to decline as it maintains its ‘America First’ focus, which favors domestic production over imports,” Boston Consulting Group said in a recent report.
“Higher tariffs and other barriers would be big reasons: The share of U.S. imports covered by tariffs has grown from 13% to 61% since January 2025,” Boston Consulting Group said.
