"Tariffs Are Trump's Own Goal... 96% of Costs Paid by Americans"

Kiel Institute Trade Data Analysis:
96% of U.S. Tariff Costs Borne by Importers and Consumers
Trump Pressures with More Tariffs Amid Greenland Ambitions

Recently, as U.S. President Donald Trump once again shakes the world with tariffs, a new study has found that 96% of the costs from last year's tariffs were borne by American importers and consumers. On January 19 (local time), Yonhap News reported that "the Kiel Institute for the World Economy (IFW) in Germany analyzed 25 million trade records totaling 4 trillion dollars (approximately 5,895 trillion won) in a report titled 'America's Own Goal: Who Pays the Tariffs.' The results showed that only 4% of the tariff costs were absorbed by exporters."

The Kiel Institute for the World Economy (IFW) in Germany criticized U.S. President Donald Trump's tariff policy in a report titled "America's Own Goal: Who Pays the Tariffs." Photo by Reuters Yonhap News

Last April, President Trump imposed various tariffs on countries around the world, stating that "foreign companies will absorb the tariff costs, so prices in the United States will not rise." However, according to the institute, 96% of the tariff costs were passed on to American buyers, and while trade volumes declined somewhat, export prices did not decrease. For example, in August last year, when the Trump administration imposed a super-high tariff of 50% on Brazil and India due to trade with Russia and other reasons, U.S. exports to those countries fell by up to 24%, but export unit prices reportedly remained unchanged.

The U.S. government is estimated to have generated more than 200 billion dollars (approximately 295 trillion won) in additional revenue from last year's tariff policy. In November last year, President Trump even proposed using tariff revenues to pay a dividend of 2,000 dollars (about 2.9 million won) per person to Americans, excluding high-income earners.

Tariffs serve as a type of consumption tax imposed on imported goods. Photo to aid understanding of the article. Photo by AP Yonhap News

The institute pointed out, "Tariffs serve as a type of consumption tax imposed on imported goods," adding, "In the long run, companies will see their margins shrink and consumers will face higher prices." The report further stated, "The claim that foreigners bear the tariff costs is nothing but a myth. The data shows the opposite: Americans are paying the price." The institute concluded, "Contrary to the U.S. government's rhetoric, the costs of punitive tariffs are not passed on to foreign exporters but instead harm the U.S. economy itself."

This directly contradicts one of President Trump's core claims and has drawn attention amid the recently reignited trade war with Europe. On January 17, President Trump announced plans to impose a 10% tariff starting February 1 and a 25% tariff starting June 1 on eight European countries that opposed the merger of Greenland, a Danish territory. In a January 19 interview with NBC, he stated that "the tariffs will remain in place until a complete and comprehensive agreement is reached regarding the full purchase of Greenland." According to this, exports from European Union (EU) member countries such as France, Germany, and the Netherlands will face a 25% tariff, while goods from the United Kingdom will be subject to a 20% tariff.

In response, Danish Prime Minister Mette Frederiksen announced on January 18 via social media that she had spoken with German Chancellor Friedrich Merz, French President Emmanuel Macron, and UK Prime Minister Keir Starmer, among other leaders, stating, "Europe will not yield to threats."