Contrary to President Donald Trump’s assertion that foreign businesses are covering the cost of his extensive tariffs, accumulating evidence suggests that American households and companies are actually bearing the expense of these import taxes.
A report released Thursday, which utilized data from the U.S. Census Bureau and Foreign Trade Statistics up to November 2025, concluded that Americans paid for almost 90% of the tariffs in 2025. This included 94% of the duties from January to August, 92% from September to October, and 86% in November.
“Our results show that the bulk of the tariff incidence continues to fall on U.S. firms and consumers,” the economists wrote. Americans “continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.”
The report’s authors—Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein—detailed that throughout 2025, the average tariff rate rose fivefold from 2.6% to 13%. They explained that if foreign firms were paying, it would be evident in those companies reducing their prices to keep the final cost in the U.S. unchanged after the tax. However, the data indicates that exporters to the U.S. have only slightly lowered their prices, forcing domestic firms to either absorb the higher costs or transfer them to consumers.
Trump has maintained that nations exporting goods to the U.S. are responsible for the tariffs. In a statement last month, Trump said: “The data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen, including large corporations that are not from the U.S.”
The president’s affirmation of the tariffs’ success coincides with heightened examination of his trade policy. On Wednesday, the House of Representatives voted, with backing from three Republicans, to repeal the tariffs on Canada due to economic worries. Simultaneously, the Trump administration is waiting for a ruling on the legality of the tariffs under the International Emergency Economic Powers Act.
Americans have observed rising prices caused by tariffs, and last month, consumer confidence dropped to its lowest level, with survey participants naming tariffs as a contributing factor to their concern.
“Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism,” Conference Board Chief Economist Dana Peterson said in a statement. “References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated. Mentions of tariffs and trade, politics, and the labor market also rose in January, and references to health/insurance and war edged higher.”
“America’s average tariff rate has increased nearly sevenfold in the past year–yet inflation has cooled and corporate profits have increased,” White House spokesperson Kush Desai said in a statement to . “The reality is that President Trump’s economic agenda of tax cuts, deregulation, tariffs, and energy abundance are reducing costs and accelerating economic growth.”
Writing on the wall
The effect of tariffs on American businesses and consumers echoes a trend observed during Trump’s first term. A 2019 study from the Journal of Economic Perspectives determined that Americans bore the full cost of tariffs through 2018, resulting in an estimated monthly loss of $1.4 billion in aggregate U.S. real income that year.
The recent New York Fed report aligns with findings from various other sources. One such source found that as of October 2025, the tariffs had contributed 0.76% to the Consumer Price Index, a measure of U.S. inflation. Similarly, the Kiel Institute found that foreign exporters were absorbing a minimal share of the cost, with U.S. buyers paying for 96%.
For months, U.S. business leaders have warned about tariffs for this precise reason, stating that domestic companies would face the decision of either absorbing the costs and hurting their profitability or raising prices for their customers.
In July 2025, Procter & Gamble announced it would increase prices on certain household items such as diapers and skincare products because of tariffs. Another company reported a price hike that same month as a consequence of the duties.
“There’s not much you can do,” Bernstein senior analyst Daniel Roeska in July. “If the policy is to put tariffs on cars, then that will increase the cost of cars, and ultimately, that will likely increase the price of cars.”
According to some economists, the collective weight of these tariffs has exceeded the advantages that Trump says the tax revenue will finance. The president has stated that tariff income will fund various programs and allow the administration to reduce debt and implement tax cuts.
Earlier this month, the nonpartisan Tax Foundation think tank released a finding. The group had earlier projected that Trump’s tax cut would boost the average tax refund by $1,000 compared to the previous year, but it now calculates that the tariff cost for Americans will rise to $1,300 in 2026, eliminating the gains from the tax reduction.
“Tariffs are really holding back the potential of the new tax law, both to deliver relief to taxpayers and to grow the economy,” Erica York, vice president of federal tax policy at the Tax Foundation, stated.