Fed Study: U.S. Absorbs 90% of 2025 Tariff Costs

New research from the Federal Reserve Bank of New York indicates that U.S. companies and consumers absorbed nearly 90 percent of the costs from President Donald Trump's tariffs imposed in 2025, contradicting the administration's assertions that foreign exporters would bear the brunt. The study, co-authored with economists from Columbia University, examined tariff incidence through November 2025 and found that American importers initially paid the duties to the government, then largely passed the expenses to domestic buyers through higher prices.

The tariffs, enacted during Trump's second term to address trade imbalances and protect U.S. industries, targeted imports from key partners and covered goods ranging from electronics and automobiles to agricultural products. Officials in the administration argued that foreign suppliers would lower their prices to retain access to the American market, thereby absorbing the levies. In a January op-ed, Trump wrote that the burden had fallen overwhelmingly on foreign producers, citing data on export-dependent nations adjusting to avoid greater losses. However, the New York Fed analysis showed that while some exporters shouldered a growing...