Key Points

  • New York Fed researchers said Thursday that U.S. businesses and consumers bore nearly 90% of the costs of tariffs imposed since April in 2025, a finding that contradicts the Trump administration's claim that foreigners pay the burden of import taxes.
  • Tariffs imposed on "Liberation Day" in April and thereafter raised the average tariff rate from 2.6% to 13% by the end of 2025. In a report, New York Fed researchers said prices of imported goods subject to average tariffs rose 11% more than those not taxed, prompting companies to adjust supply chains.
  • "U.S. businesses and consumers continue to bear most of the economic burden of the high tariffs in 2025," the New York Fed researchers said.

In-Depth Analysis

President Trump has for months claimed that tariffs are paid by foreigners, not U.S. businesses and consumers, thereby improving the nation's fiscal position and the economic well-being of American workers.

However, the New York Fed noted that, in addition to its own research, two other studies show the highest costs fall on the United States rather than on foreign exporters.

The Kiel Institute, based in Germany, said in a report last month that U.S. importers and consumers bore 96% of the costs of tariffs imposed since April. The Kiel Institute said Trump's tariffs generated about $200 billion in revenue in 2025, but only 4% of that came from outside the United States.

The institute argued that Trump's tariffs act like an excise tax on imported goods, reducing the variety and quantity of goods available to consumers.

The Tax Foundation reported on January 6 that import tariffs increased the average U.S. household's tax burden by $1,000 last year and will rise to $1,300 this year.

The Yale Budget Lab reported similar findings last month: under the Trump tariff regime, prices will rise 1.3% in the short term, costing the average U.S. household $1,751. The current average tariff rate of 16.9% is the highest level of import taxes since 1932.

The Yale Budget Lab said import tariffs will slow U.S. GDP growth by 0.4 percentage points this year and drag on economic expansion by 0.3%, equivalent to a reduction of $100 billion per year in 2025 dollars.

Additionally, tariffs will push the unemployment rate up by 0.6 percentage points by the end of this year, reducing jobs by 1.3 million by the end of 2025.

Trump's tariffs are part of the administration's efforts to revitalize domestic manufacturing, which could reduce the U.S. share of global trade and potentially weaken Washington's influence over trading partners.

"The U.S. share of global merchandise trade value is expected to decline as it adheres to an 'America First' approach, favoring domestic production over imports," Boston Consulting Group said in a recent report.

"Higher tariffs and other barriers will be an important reason: since January 2025, the share of U.S. imported goods subject to tariffs has risen from 13% to 61%," Boston Consulting Group said.