“In the near term, CBO anticipates, U.S. businesses will absorb 30 percent of the import price increases by reducing their profit margins; the remaining 70 percent will be passed through to consumers by raising prices . . . the net effect of tariffs is to raise U.S. consumer prices by the full portion of the cost of the tariffs borne domestically (95 percent).”
Liberty Street Economics: “Over the course of 2025, the average tariff rate on U.S. imports increased from 2.6 to 13 percent. In this blog post, we ask how much of the tariffs were paid by the U.S., using import data through November 2025. We find that nearly 90 percent of the tariffs’ economic burden fell on U.S. firms and consumers….We highlight two main results. First, 94 percent of the tariff incidence was borne by the U.S. in the first eight months of 2025. This result means that a 10 percent tariff caused only a 0.6 percentage point decline in foreign export prices. Second, the tariff pass-through into import prices has declined in the latter part of the year. That is, a larger share of the tariff incidence was borne by foreign exporters by the end of the year. In November, a 10 percent tariff was associated with a 1.4 percent decline in foreign export prices, suggesting an 86 percent pass-through to U.S. import prices. Given that the average tariff in December was 13 percent (see the first chart), our results imply that U.S. import prices for goods subject to the average tariff increased by 11 percent (13 times 0.86) more than those for goods not subject to tariffs. These higher import prices caused firms to reorganize supply chains, as suggested by the findings presented in the two charts above. In sum, U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.
US businesses and consumers bore 90% of the costs of US President Donald Trump’s tariffs, a New York Federal Reserve report showed, as his tariff regime comes under increasing pressure. The report undermines Trump’s claim that foreign companies would shoulder the burden of duties, the Financial Times noted. US lawmakers on Wednesday voted to remove tariffs on Canadian imports — a symbolic but “politically consequential rebuke” of the president’s signature policy tool, The New York Times wrote. The US Supreme Court is also expected to rule on the tariffs’ legality. Meanwhile, countries targeted by Trump’s duties have chosen to “retaliate” by reducing their reliance on Washington, a Bloomberg columnist argued, contributing to a fall in the US’ share of global exports…”
