US firms and consumers bore about 90% of Trump's 2025 tariffs, NY Fed study finds
Federal Reserve Bank of New York research shows American businesses and consumers paid the bulk of tariff costs last year, contradicting administration claims.
4 hrs ago
US businesses and consumers paid approximately 90% of the cost of President Donald Trump's tariffs imposed in 2025, according to a study released Thursday by the Federal Reserve Bank of New York.
The research contradicts repeated claims by the Trump administration that foreign countries and exporters were bearing the primary burden of the tariffs. In a January 30 Wall Street Journal op-ed, Trump stated that "data shows that the burden, or 'incidence,' of the tariffs has fallen overwhelmingly on foreign producers and middlemen, including large corporations that are not from the U.S."
The New York Fed's analysis found that as the average U.S. tariff rate on imported goods rose to 13% in 2025 from 2.6% at the start of the year, the cost was largely absorbed domestically. In the first eight months of 2025, 94% of tariff costs were borne by American businesses and consumers. That share declined to 92% in September and October, and fell further to 86% in November as foreign exporters began absorbing a larger portion of the costs.
The tariffs applied to goods from Mexico, China, Canada, and the European Union. Rather than lowering prices to offset potential demand reductions in the U.S. market, foreign exporters maintained their prices, passing tariff costs to importing companies, which in turn raised prices for consumers and businesses.
"Our results show that the bulk of the tariff incidence continues to fall on US firms and consumers," the study's authors wrote in a blog post. "They continue to bear the bulk of the economic burden of the high tariffs imposed in 2025."
The researchers, identified as Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein, calculated that with the average tariff at 13% in December, U.S. import prices for goods subject to the average tariff increased by approximately 11% more than they would have without the tariffs.
The Trump administration has maintained that foreign companies and nations dependent on exports had limited alternatives. In his op-ed, Trump noted that "in many cases, nations that are heavily dependent on exports have had no choice but to 'eat' the tariffs to avoid even worse losses from their excess capacity."