A fresh report from the Federal Reserve Bank of New York cuts through the political noise and lands on one clear point. Americans carried almost the entire cost of the Trump administration’s 2025 tariffs.
That finding challenges repeated claims that foreign exporters absorbed the hit. The data shows that U.S. consumers and businesses shouldered close to 90% of the burden instead.
In the first eight months of 2025, about 94% of tariff costs were passed directly to U.S. importers. By November, that figure eased slightly, but Americans still bore 86% of the cost. The New York Fed put it plainly in its report. U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.
How the Costs Landed on Americans?
And if the exporter keeps its price steady, the importer now pays $125. That higher cost does not vanish, and it rarely stays contained.
For the foreign seller to absorb the tariff, it would need to cut its price sharply. In this example, it would have to drop the price to $80 so that the 25% tariff brings the total back to $100. The New York Fed found that this rarely happened. For a 10% tariff, exporters cut prices by just 0.6% on average.
That tiny adjustment barely dents the added cost. The rest lands on the American importer, who then raises prices for wholesalers, retailers, or consumers.
Over time, those increases show up in everyday items. Imported parts cost more, finished goods cost more, and companies often pass those increases down the chain.
Economists Largely Agree on the Impact
It projected an additional $1,300 hit in 2026 if the tariffs stayed in place.
The group described the tariffs as the largest U.S. tax increase since 1993. That is a strong statement, and it reflects the scale of the policy.
Researchers at the National Bureau of Economic Research reached a similar conclusion. They found a pass-through rate close to 100%, meaning almost the full cost of tariffs showed up in U.S. prices.
That near total pass-through reinforces the idea that tariffs function as domestic taxes. The money does not magically transfer to foreign governments. The Kiel Institute for the World Economy also studied the 2025 measures. Its researchers found that foreign exporters generally did not slash prices to offset U.S. tariffs.
Rather than slash prices, many companies chose to hold the line and ship less. That decision helped preserve profit margins, but it also meant U.S. buyers ended up paying more while receiving fewer goods. When research groups in different countries arrive at the same conclusion independently, it adds weight to the argument.
The White House has stood by the tariff approach. Officials point to cooling inflation and rising corporate profits during that stretch as evidence that the economy managed the pressure.
Spokesperson Kush Desai has maintained that President Trump’s economic program is aimed at lowering costs and speeding up growth. Backers say the tariffs shielded key American industries and nudged companies to invest more at home.