Summary
Recent research by the Federal Reserve Bank of New York shows that nearly the entire cost of President Trump's tariffs, imposed on goods from several countries, is being paid by American companies and consumers. The tariffs increased prices for imports, with most of the cost passed on to U.S. shoppers, rather than the exporting countries lowering their prices. Other economic studies support these findings, noting that tariffs act like a new tax on American households.
Key Facts
- The average tariff rate on imported goods in 2025 rose to 13% from 2.6% at the start of the year.
- The New York Fed found that 90% of the cost from these tariffs was paid by U.S. companies and consumers.
- Exporting countries like Mexico, China, Canada, and the EU did not lower prices to maintain U.S. demand.
- Past and current research, like that from the Kiel Institute, confirms almost all tariff costs are passed to U.S. import prices.
- The National Bureau of Economic Research also reported that U.S. consumers bear almost all tariff costs.
- The Tax Foundation said tariffs added $1,000 to American household costs in 2025 and an estimated $1,300 in 2026.
- The "effective" tariff rate, considering reduced goods purchases, is now 9.9%, the highest since 1946.
