Trump Tariffs Leave U.S. Companies and Consumers Bearing 90% of the Cost

Different from Trump's Claim that "Foreign Companies Will Bear the Cost"

U.S. President Donald Trump imposed high tariffs while insisting that "overseas exporters will bear the cost," but a new study has found that it was actually U.S. companies and consumers whose cost burden increased.

On the 12th (local time), Bloomberg and other outlets reported, citing a report from the Federal Reserve Bank of New York, that over an 11-month period last year, about 90% of the costs arising from the Trump administration's tariff policy were passed on to U.S. companies and consumers.

A cargo ship docked at New York Harbor. Photo by Getty Images, Yonhap News

After President Trump announced on April 2 last year, "Liberation Day," that he would impose broad new import tariffs, the average U.S. tariff rate surged from 2.6% to 13%. Amid the fallout from the U.S.-China trade war, tariffs on some Chinese products at one point climbed into the triple digits.

As tariffs rose in this way, about 94% of tariff-related costs from January to August last year were passed on to U.S. companies and consumers. The burden on overseas exporters increased by only 6%. Although the burden on overseas exporters grew over time, U.S. citizens are still shouldering most of the cost. In September and October last year, U.S. companies and consumers bore 92% of tariff costs. In November, that share fell to 86%. The researchers predicted, "They will continue to shoulder most of the economic burden."

Other studies published earlier reached similar conclusions. Last month, the Kiel Institute for the World Economy in Germany announced that the tariff pass-through rate reached 96%. The National Bureau of Economic Research (NBER) estimated it at 94%. The bipartisan think tank Tax Foundation stated that, due to the tariff hikes, the tax burden on each U.S. household last year was expected to increase by an average of about 1,000 dollars (approximately 1.44 million won). This year, it is projected to rise to 1,300 dollars.

Contrary to President Trump’s claim that tariff hikes would increase the burden on overseas exporting companies, other officials within the administration, including Treasury Secretary Scott Bessent, have acknowledged that U.S. retailers such as Walmart have been affected by the higher tariffs.