Despite President Donald Trump insisting it’s foreign businesses paying for his raft of tariffs, mounting data indicates that, actually, American households and businesses are footing the bill for his import taxes.
“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 authors—Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein—explained in their report that over the course of 2025, average tariff rates quintupled from 2.6% to 13%. If foreign firms were the ones paying for the levies, it would be reflected in those companies having to lower prices in order for them to remain the same on American soil once the taxes were applied. Instead, their data reflects that companies exporting to the U.S. have only modestly decreased their prices, leaving it to domestic companies to absorb the increased costs or pass them down to consumers.
“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 Fortune. “The reality is that President Trump’s economic agenda of tax cuts, deregulation, tariffs, and energy abundance are reducing costs and accelerating economic growth.”
U.S. business leaders have been sounding the alarm on tariffs for months for this exact reason, claiming it would be domestic businesses making the call to either absorb costs at the expense of their own margins, or pass down costs to customers.
