Trump Trade Policy 2025:A major new economic analysis reveals that U.S. consumers and businesses bore the overwhelming majority of the financial burden from the tariffs imposed by the administration of former President Donald Trump in 2025 challenging longstanding claims that foreign exporters would shoulder most of the costs.
Trump Trade Policy 2025: Research
The Federal Reserve Bank of New York discovered that almost 90 percent of tariff expenses from the previous year were paid for by domestic sources because American households and businesses experienced higher costs for imported products. The study, which examined tariff data through November 2025, found that:
- Researchers discovered that U.S. importers and consumers experienced 94 percent of tariff expenses during the first eight months of the year. By November, foreign exporters absorbed slightly more of the costs but U.S. buyers still carried roughly 86 % of the burden.
- The United States experienced a significant tariff increase during 2025 when its average tariff rate for imported goods increased from approximately 2.6 percent to 13 percent according to economists who studied the effect on retail product prices.
- Independent estimates suggest that the tariffs added roughly $1,000 to $1,200 in extra costs per U.S. household last year acting effectively like a tax on American consumers.
What the Data Reveals?
Tariffs are taxes levied on imported goods typically intended to protect domestic industries or to pressure trading partners. The Trump administration repeatedly asserted that foreign companies would “pay” these tariffs by lowering their export prices.
However, the New York Fed’s analysis supported by similar findings from the Congressional Budget Office paints a very different picture: most of the added cost is simply passed through to Americans.
It said “higher tariffs directly increase the cost of imported goods, raising prices for U.S. consumers and businesses.” When it comes to who will pay the tariffs, the CBO said foreign exporters will absorb 5% of the cost, and in the near term, “U.S. businesses will absorb 30% of the import price increases by reducing their profit margins; the remaining 70% will be passed through to consumers by raising prices.”
In economic terms, when an importer pays a tariff, that cost can either be absorbed by the seller (through lower prices) or passed on to the buyer (through higher retail prices). The study’s authors found that foreign exporters rarely reduced their prices by enough to offset the tariffs. Instead, U.S. firms and households ended up footing the bill.
Impact on Prices and Consumers
Tariff increases last year affected a wide range of imported goods from electronics and furniture to food and manufactured parts. These costs often show up indirectly in consumer prices rather than as explicit taxes, making them harder for shoppers to spot even as they tighten household budgets.
“Almost 90% of the economic burden from Trump’s trade war has been borne by US companies and consumers, according to a new study by economists at the Federal Reserve Bank of New York..” pic.twitter.com/wpAB5ZOjBZ
— Jana Hlistova (@Janicka) February 13, 2026
Economists note that such tariff-induced price effects can be subtle but widespread. A separate non-partisan estimate from the Tax Foundation found that U.S. households faced an average tariff-related tax increase of around $1,000 in 2025, with projections rising higher if current policies remain unchanged.
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Political and Economic Debate
The findings have led to disputes between lawmakers and economists. The Republican members of Congress who recently voted against specific tariffs which included Canadian goods tariffs demonstrate their support for rolling back those tariffs.
The administration officials defend their position by stating that tariff policies create economic advantages through domestic production growth and higher federal revenue. Critics argue that tariffs function as concealed taxes which decrease consumer purchasing power while failing to provide the anticipated subsequent benefits.
