American consumers and companies paid nearly 90% of the cost of President Donald Trump’s tariffs through late 2025, according to a new report from the Federal Reserve Bank of New York.
The study adds to a growing body of evidence indicating American families pay a price for Trump’s import taxes, despite the president’s assertion that the financial burden falls entirely on other countries.
Trump’s tariffs equated to a tax increase of $1,000 per household in 2025, according to a Feb. 6 report from the nonpartisan Tax Foundation. Households are expected to pay another $1,300 in 2026.
The tariffs are the largest U.S. tax increase since 1993, according to the Tax Foundation analysis. Tariffs are a tax − but on whom?
On the campaign trail in September 2024, promoting tariffs, Trump told supporters, “It’s not going to be a cost to you, it’s going to be a cost to another country.”
Trump repeated the claim in a Jan. 30 op-ed in the Wall Street Journal, writing, “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 New York Fed study, published Feb. 12, suggests otherwise.
Trump’s tariffs are mostly a tax on Americans
Through August 2025, 94% of the import taxes fell on American companies and consumers, according to the study. By November, the “pass-through” rate had dipped to 86%.
“In sum, U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025,” the researchers wrote.
The study affirms what many economists had predicted: That Trump’s tariffs would be mostly a tax on Americans.
“The study by the New York Fed confirms what most economists expected – U.S. consumers and businesses pay most of the costs from the Trump tariffs,” said Wayne Winegarden, senior fellow in economics at the Pacific Research Institute, a free-market think tank.
The Wall Street Journal seized on the report in a Feb. 13 editorial, opining, “No matter how often President Trump insists his tariffs are taxing foreigners to enrich the U.S., economic studies keep showing that Americans actually pay the bill.”
Through late 2025, tariffs added about 0.7 percentage points to the U.S. inflation rate, according to a November paper by the National Bureau of Economic Research. In other words, without tariffs, the inflation rate for September might have dropped from 3% to 2.3%.
Tariffs have elevated prices on many imported items
Trump’s tariffs have inflated prices across a host of imported items, an effect visible in the January inflation report. The price of household furnishings and supplies rose 3.8% from January 2025 to January 2026. Furniture and bedding prices rose 4%. Prices for dishes and flatware rose 5%.
Tariffs are complicated. The actual costs are typically split between exporters in one country and importers in another.
The New York Fed provided this example:
Imagine a foreign exporter charges $100 for a product, and the U.S. government imposes a 25% tariff. If the exporter doesn’t lower the price, the importer pays a $25 tariff, increasing the total price to $125. That means 100% of the tax falls on American consumers and companies.
In the same example, imagine the exporter responds to the tariff by lowering the price to $80. Now, the importer pays a $20 tariff, and the total import price remains $100. The exporter effectively absorbs all of the tax.
As it turned out, most exporters didn’t lower prices much in response to Trump’s tariffs. A 94% pass-through rate means the typical foreign exporter responded to a 10% tariff by reducing prices 0.6%, or 6 cents for every $10.
As exporters and importers absorbed the impact of Trump’s tariffs, their impact softened at every step. Some exporters trimmed prices. American companies found cheaper products from other countries or absorbed part of the tariff themselves.
In the end, roughly 20% of Trump’s tariffs reached actual consumers, according to the National Bureau of Economic Research paper.
This article originally appeared on USA TODAY: Americans, not other countries, paid Trump’s tariffs in 2025
Reporting by Daniel de Visé, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
