By John Q. Hosedrinker 
According to a recent Goldman Sachs report, U.S. consumers are currently bearing as much as 55% of the costs associated with President Trump’s tariffs on imports, and that number could rise further. This assessment comes as consumer prices have increased monthly since April, with the Consumer Price Index (CPI) reaching 2.93% in August. Despite the administration’s assertion that foreign exporters will ultimately bear the cost, analysts’ findings indicate that consumers are feeling the burden, even if it is less than during the 2018 trade war. The report also notes that the potential doubling of tariffs on China and other actions could significantly increase costs, potentially reaching 70% for consumers.
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U.S. consumers bearing more than half the cost of tariffs so far, it seems, is the unfortunate reality we’re facing. It’s a bit of a “no duh” moment, really. If you know how tariffs function, the idea that American consumers are shouldering a significant portion of the burden shouldn’t come as a surprise. The initial hope, perhaps, was that foreign exporters would lower their prices to absorb the cost. But that’s not what’s happening. Instead, it’s the American consumer who’s feeling the pinch.
Essentially, it’s like a hidden tax. It’s a regressive national sales tax, disproportionately impacting the working class. We are seeing this unfold in real-time, at the grocery store, with my normal grocery bill rising substantially over the past few months. This is a slow burn, where the cost of goods gradually increases, making it harder to detect the underlying issue until it hits you like a brick wall.
So, where’s the other half of the cost going? Well, some of the costs are initially absorbed by companies. They’re hesitant to be the first to raise prices, hoping the tariffs will disappear. But that’s not sustainable forever. Ultimately, businesses will need to raise prices to cover the increased costs, meaning consumers end up paying the full cost. This also means that companies might be incentivized to hold out on lowering prices even when tariffs are removed, as they know consumers are accustomed to the higher cost and the company can profit from the difference.
The fear is that this could contribute to inflation. Considering possible rate cuts, it’s a scary prospect, especially if you are getting a small amount back in a tax refund that does not offset the tariff costs. The whole scenario feels like a way to shift revenue away from income tax and towards a less transparent system.
This whole situation is a reflection of how tariffs work. They are essentially a tax on imports, and like any tax, it’s borne by someone. This ends up being the consumer. Tariffs can manipulate the market, and the only people who benefit are the ones in power. This, in turn, impacts everyone’s wallet.
Some may say, “Well, it’s not me, it’s your government.” But the reality is, we are all paying the price. It’s a classic case of the middle class bearing the brunt of economic policies, with the wealthy reaping the benefits. It’s a case of more milking of the middle class. The working class is bearing the largest federal tax increase in modern US history.
And the worst part? Some people are seemingly oblivious. It’s astonishing how readily some can be convinced that it’s the other side’s fault, even as they’re clearly being negatively impacted. They’ll keep cheerleading for their orange God, even when their wallets are suffering. Some may still claim that everything is fine and hail the economic benefits.
The truth is, it’s going to be a tough few years. We should be concerned about the long-term implications of these policies. We’re paying the cost.