New study says American consumer pays all but 4% of tariff costs
Straight Arrow News • • business
Key Points:
- A study by the German Kiel Institute for the World Economy confirms that Americans bear 96% of the cost of Trump administration tariffs, with foreign exporters absorbing only 4%.
- The research shows U.S. prices rose nearly one-for-one with tariffs, while foreign exporters maintained prices and reduced their market share rather than lowering prices to offset tariffs.
- Four factors explain why foreign companies don’t absorb tariff costs: availability of alternative markets, impracticality of large price cuts, strategic pricing to avoid further tariffs, and sticky supply chain relationships.
- Although tariffs have not triggered a recession, they have increased costs for U.S. consumers, who paid an estimated $758 each in 2025, while generating $195 billion in government revenue.
- Pro
