Trump-era tariffs largely paid by US consumers, not foreign exporters, says study
President Donald Trump’s tariffs on imported goods are borne largely by American importers, their domestic customers and, ultimately, US consumers, according to a study by a German think tank.
In a report released Monday, the Kiel Institute for the World Economy said that “foreign exporters did not meaningfully reduce their prices in response to US tariff increases,” adding that “the $200 billion surge in customs revenue represents $200 billion extracted from American businesses and households".
The study concluded that foreign firms shoulder only around 4% of the overall tariff burden, while about 96% is passed on almost entirely to US buyers who pay the duties and must either absorb the costs or raise prices. Manufacturers and retailers then face the choice of passing higher costs on to consumers or accepting reduced profit margins.
As a result, the researchers argued that “the tariff functions not as a tax on foreign producers, but as a consumption tax on Americans,” the report’s authors, Julian Hinz, Aaron Lohmann, Hendrik Mahlkow and Anna Vorwig, wrote.
