A pair of authoritative U.S. reports has undercut a central claim of the Biden-era political debate over tariffs: the bulk of the economic pain from President Trump’s large-scale import levies is being paid by American consumers and companies, not by foreign exporters. The New York Federal Reserve’s recent analysis concludes that roughly 90% of the tariff shock since the president’s policy escalation landed on U.S. shoulders, a finding matched in broad outline by the Congressional Budget Office.
The New York Fed breaks the burden down month by month, estimating that the United States absorbed 94% of the tariff impact from January to August, 92% from September to October and 86% in November. The CBO’s independent tally arrives at a similar distribution: foreign exporters bear only about 5% of the cost, U.S. firms absorb roughly 30% in the short run and the remaining 65–70% is passed to consumers through higher prices.
Those price effects are already measurable. The Fed notes the average statutory tariff rate rose from 2.6% to 13% after the administration announced the new measures on April 2, with the spike driven largely by tariffs on Chinese goods. A nonpartisan Tax Foundation estimate cited by the reports suggests U.S. households will pay, on average, about $1,000 more in 2025 in direct tariff-related costs.
The findings intensify a political and legal pushback that has been growing in Washington. The Supreme Court is weighing the administration’s authority to levy broad import penalties under the International Emergency Economic Powers Act, and a recent House vote that would have terminated the president’s use of emergency powers to impose tariffs on Canadian goods passed with six Republicans joining Democrats—an unusual sign of intra-party unease even if the measure faces likely veto prospects.
Markets, too, have felt the strain. The reports note heightened volatility in financial markets and rising operating costs for retailers and manufacturers—Walmart and other major chains have publicly flagged the effect on margins and sourcing choices. The empirical finding that consumers mainly bear the burden weakens the administration’s argument that tariffs will chiefly extract revenue from foreign countries or spur a decisive reshoring of U.S. manufacturing.
For global partners the implication is straightforward: tariff threats and retaliatory risks remain a source of near-term uncertainty for trade flows and investment plans. For U.S. policymakers, the evidence presents a stark trade-off between the political messaging value of protectionism and its tangible domestic costs, which appear to fall disproportionately on the voters who the policy is meant to protect.