Despite President Trump's claims that foreign countries are paying for his sweeping tariffs, new economic analysis has confirmed what experts have long warned: American consumers and businesses are bearing the brunt of these import taxes. In fact, a staggering 90% of the cost is being passed on to US households and companies, according to a report from the Federal Reserve Bank of New York.
What this really means is that the President's trade war is effectively a tax hike on the American people - a stark contrast to his rhetoric about foreign nations "paying" for the tariffs. As The New York Times reported, the data shows that importers in the US have been covering the vast majority of the added costs, either by raising prices for consumers or accepting lower profits themselves.
The Inconvenient Truth About Tariffs
This latest analysis, which examined trade data from January to November 2025, aligns with findings from other respected institutions like the Congressional Budget Office and the National Bureau of Economic Research. Collectively, these studies challenge the Trump administration's narrative and shine a light on the true impact of his protectionist policies.
The bigger picture here is that tariffs, while intended to shield domestic industries, often backfire by hurting the very consumers and businesses they're meant to protect. As Investopedia reported, the research indicates that importers have little choice but to pass on the added costs, either by raising prices or negotiating less favorable terms with their suppliers.
This dynamic undermines the core rationale for tariffs, which is to support American jobs and industries. Instead, the evidence suggests that Trump's trade war is delivering the opposite effect - saddling US consumers and businesses with higher prices, while failing to meaningfully shift production back to domestic manufacturers.
As the recent analysis on the Iranian economy showed, protectionist policies often come with unintended consequences that can ripple through the broader market. In this case, the data makes clear that the true burden of Trump's tariffs is falling squarely on American shoulders, not foreign ones as he has claimed.