By John Q. Hosedrinker 
Mounting data from sources including the Federal Reserve Bank of New York indicates that American households and businesses are bearing the vast majority of the cost of President Trump’s tariffs, despite presidential claims to the contrary. The analysis shows that Americans paid for nearly 90% of the tariffs in 2025, a trend consistent with earlier periods of tariff imposition. This burden is reflected in companies either absorbing increased costs, impacting their profit margins, or passing them on to consumers through higher prices, leading to decreased consumer confidence. Economists argue that the economic strain from these tariffs outweighs the claimed benefits, such as funding national debt reduction or providing tax rebates, with the cost to households potentially exceeding any tax relief.
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It appears that New York Fed economists have confirmed a reality that many have suspected all along: Americans are, in fact, bearing the vast majority of the cost associated with former President Trump’s tariffs. The data suggests that approximately 90% of these tariffs are being paid for by consumers within the United States, rather than by the countries from which goods are being imported.
This finding, while perhaps not surprising to many who have followed economic principles, stands in stark contrast to some of the public pronouncements made during the implementation of these trade policies. The notion that foreign entities would absorb these costs, effectively paying for American tariffs, seems to have been a central theme in the rhetoric surrounding the trade disputes.
In essence, when a tariff is imposed on imported goods, it’s a tax levied at the border. The entity responsible for paying that tax is typically the importer. However, the economic reality of this situation is that these costs are rarely absorbed by the importer in the long run. Instead, they are usually passed on to the end consumer through higher prices for the goods in question.
This dynamic is a fundamental aspect of how tariffs operate within a market economy. Businesses, when faced with increased costs for their raw materials or finished products, will often seek to maintain their profit margins by increasing the prices they charge to their customers. This ripple effect ultimately leads to consumers paying more for the items they purchase.
Therefore, the conclusion from the New York Fed economists essentially reiterates a well-established economic principle: tariffs function as a tax on domestic consumers. The claim that other nations would absorb these costs without impacting American shoppers appears to have been largely unfounded, according to this research.
The implications of this are significant. For American households, it means that the cost of everyday goods could have been inflated due to these tariffs. This added expense can strain household budgets, particularly for those with lower or fixed incomes, potentially impacting overall consumer spending and economic growth.
Furthermore, this confirmation raises questions about the efficacy and true impact of the tariff strategy. If the intended goal was to shift the economic burden to other countries, and the data suggests that the burden has instead fallen largely on American consumers, then the effectiveness of the policy in achieving its stated objectives comes into question.
It’s also worth considering the broader economic landscape. When consumers are paying more for goods, their purchasing power is diminished. This can lead to a slowdown in demand, which, in turn, can affect businesses, potentially leading to reduced production, job losses, and a less robust economy overall.
The economists’ findings suggest that the narrative of foreign countries paying for American tariffs may have been a mischaracterization of the economic reality. The complex web of international trade and pricing mechanisms seems to have ensured that the ultimate cost was borne by the American consumer.
This confirmation from a reputable institution like the New York Fed lends weight to the argument that tariffs are, in practice, a domestic tax. It highlights the importance of understanding the intricate workings of economics when discussing trade policies and their real-world consequences for citizens. The study essentially validates what many economists and observers had argued from the outset: that these tariffs were, in large part, a self-imposed cost on the American economy and its consumers.