U.S. consumers and businesses paid nearly 90% of the cost of President Donald Trump’s tariffs through the end of 2025, according to a new report from the Federal Reserve Bank of New York.
The study adds to a growing body of evidence showing that American families are paying a price for Trump’s import taxes, despite the president’s claim that the financial burden falls squarely on other countries.
Trump’s tariffs amounted to a $1,000 tax increase per household by 2025, according to a Feb. 6 report from the independent Tax Foundation. Households are expected to have to pay another $1,300 by 2026.
According to the Tax Foundation’s analysis, the rates are the largest U.S. tax increase since 1993. Rates are a tax, but whose?
During his September 2024 campaign, promoting tariffs, Trump told his supporters, “It’s not going to be a cost to you, it’s going to be a cost to another country.”
Trump repeated this claim in a Jan. 30 op-ed in the Wall Street Journal, writing: “The data show that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign manufacturers and intermediaries, including major non-U.S. companies.”
The New York Fed study, released on February 12, suggests otherwise.
Trump’s tariffs are primarily a tax on Americans
Through August 2025, 94% of import taxes fell on U.S. businesses and consumers, according to the study. By November the pass-through rate had fallen to 86%.
“In short, U.S. businesses and consumers will continue to bear the brunt of the economic burden of the high tariffs imposed in 2025,” the researchers wrote.
The study confirms what many economists had predicted: that Trump’s tariffs would primarily be a burden on Americans.
“The New York Fed survey confirms what most economists expected: American consumers and businesses are paying the bulk of the costs of the Trump tariffs,” said Wayne Winegarden, a senior economics fellow at the Pacific Research Institute, a free-market think tank.
The Wall Street Journal cited the report in a Feb. 13 editorial, stating, “No matter how many times President Trump insists his tariffs tax foreigners to enrich the U.S., economic studies continue to show that Americans are actually footing the bill.”
Through the end of 2025, the rates added about 0.7 percentage points to U.S. inflation, according to a November article from the National Bureau of Economic Research. In other words, without tariffs, the September inflation rate could have fallen from 3% to 2.3%.
Tariffs have raised prices for many imported items
Trump’s tariffs have driven up the prices of many imported items, an effect visible in the January inflation report. The price of household furniture and supplies increased by 3.8% between January 2025 and January 2026. Furniture and bedding prices have increased by 4%. Prices for crockery and cutlery increased by 5%.
Rates are complicated. Actual costs are typically split between exporters in one country and importers in another.
The New York Fed gave this example:
Imagine that a foreign exporter charges $100 for a product, and the US government imposes a 25% tariff. If the exporter does not lower the price, the importer pays a $25 tariff, raising the total price to $125. That means 100% of the tax falls on American consumers and businesses.
In the same example, imagine that the exporter responds to the tariff by lowering the price to $80. Now the importer pays a tariff of $20, and the total import price remains $100. The exporter essentially absorbs all the tax.
It turned out that most exporters did not cut prices much in response to Trump’s tariffs. A 94% transit rate means that the typical foreign exporter responded to a 10% tariff by cutting prices by 0.6%, or 6 cents for every $10.
As exporters and importers absorbed the impact of Trump’s tariffs, their impact was softened at every step. Some exporters cut prices. American companies found cheaper products from other countries or absorbed some of the tariff themselves.
Ultimately, roughly 20% of Trump’s tariffs reached actual consumers, the National Bureau of Economic Research article said.
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
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