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\n When tariffs are tacked on to many imported goods, someone\u2019s got to foot the bill<\/a>.\n <\/p>\n \n According to President Donald Trump, foreign countries and overseas businesses are eating the cost. But evidence shows that American consumers and businesses are paying for the tariffs the administration has implemented as its go-to policy levers<\/a>. <\/strong>\n <\/p>\n \n \u201cIt been proven, that even at this late stage, Tariffs have not caused Inflation, or any other problems for America, other than massive amounts of CASH pouring into our Treasury\u2019s coffers,\u201d Trump posted on his social media site, Truth Social, earlier this month. \u201cAlso, it has been shown that, for the most part, Consumers aren\u2019t even paying these Tariffs, it is mostly Companies and Governments, many of them Foreign, picking up the tabs.\u201d\n <\/p>\n \n Trump\u2019s post did not include any substantiation for his claims.\n <\/p>\n \n There is a growing field of evidence to the contrary: Economic data<\/a>, academic research<\/a>, businesses\u2019 expenses<\/a>, and people\u2019s first-hand experiences<\/a> are showing that it\u2019s American firms and consumers who are seeing increasingly higher costs due to the tariffs.\n <\/p>\n \n That burden is expected to grow only heavier in the months \u2014 and, potentially, years \u2014 to come as more tariffs take effect<\/a>, and others settle more deeply<\/a> into supply chains.\n <\/p>\n \n If foreign exporters are absorbing tariff costs, one possible way to see that in US economic data is whether they\u2019re lowering their <\/strong>pre-tariff export prices.\n <\/p>\n \n If that\u2019s the case, it would show up as lower or falling US import prices.\n <\/p>\n \n Recent months\u2019 data<\/a>, however, has shown that import prices (which exclude the costs of tariffs, insurance and shipping costs) have held mostly steady. They\u2019ve risen by 0.5% since the November election and by 0.2% since March, after which the bulk of new tariffs were announced, according to a recent note from Pantheon Macroeconomics.\n <\/p>\n \n \u201cOne argument that had looked plausible until recently was that import prices had been supported by pre-tariff stockpiling in [the last part of 2024 and the first three months of 2025], which saw goods imports soar to record highs,\u201d Pantheon economists Samuel Tombs and Oliver Allen wrote in an August 19 note. \u201cThat left foreign exporters flush with orders, providing little incentive to cut pre-tariff prices to remain competitive. But import prices have remained resilient despite goods imports dropping back very sharply in [the second quarter], suggesting a steep decline in prices ahead is unlikely.\u201d\n <\/p>\n \n A more granular look at import price data indicates that there\u2019s a slight dip in import prices from China; however, for the vast majority of countries, it\u2019s basically been flat, Olu Sonola, head of US economic research at Fitch Ratings, told CNN in an interview.\n <\/p>\n \n \u201cSo that\u2019s telling you that all of that is paid by importers,\u201d he said. \u201cIt\u2019s now a question of, is it the manufacturer, is it the retailers, or is it the small business that\u2019s bringing it in? They now have to figure out, \u2018How much of this can I take on, and how much of this will I pass on?\u201d\n <\/p>\n \n \u201cIt\u2019s very likely they will pass the bulk of it on,\u201d he added.\n <\/p>\n \n To this point, consumers have been mostly shielded from starkly higher prices.\n <\/p>\n \n Through June, US consumers had absorbed 22% of tariff costs, but that share was expected to rise to 67% by October, according to an August 10 estimation from Goldman Sachs economists. That assessment led to a demand from Trump<\/a> that the investment giant fire its chief economist.\n <\/p>\n \n Goldman Sachs economists said they expect that about 70% of the direct costs of the tariffs will eventually fall on the consumer, and that the total could rise to 100% if including the spillover effects of domestic producers raising their prices (something that has already occurred and is expected to continue \u2014 more on that below).\n <\/p>\n \n There\u2019s a laundry list of reasons<\/a> why tariff-driven price hikes are a slow boil: Businesses loaded up their warehouses with pre-tariffed goods; higher costs have been split by entities along the supply chain, lessening the blow at the retail store; and Trump\u2019s fits-and-starts approach to tariffs has meant that the bulk of them did not go into effect for months, and many items are exempted (for at least now).\n <\/p>\n \n At the same time, inflation has remained relatively tame for both good and not-so-good reasons: Ongoing deflationary trends in key areas, marking a continued unwinding from pandemic-era shortages and price spikes; falling gas prices (they\u2019re down 9.5% from July of last year) amid global economic uncertainty; and then because of depressed consumer demand in areas such as travel.\n <\/p>\n \n Still, recent Consumer Price Index inflation reports reveal increases in the cost of certain imports the United States relies on heavily, including household furnishings, linens, tools, toys and sporting goods.\n <\/p>\n \n As of August 8, imported goods cost 5% more than pre-tariff trends predicted and domestically produced goods are running 3% higher, according to newly released research from Harvard Business School professor Alberto Cavallo and colleagues.\n <\/p>\n \n Cavallo, in an interview with CNN, said he expects that the passthrough will continue in steady increments but could be limited in some cases depending on the competitiveness of the product category and industry.\n <\/p>\n \n \u201cI think it could take over a year for us to see some of the effects of these tariffs,\u201d he said. \u201cBut a year from now, maybe two years from now, we\u2019ll notice that consumers ended up paying a significant amount of the tariffs even if they didn\u2019t notice the increases right away.\u201d\n <\/p>\n \n New research last week from the Federal Reserve Bank of Atlanta showed that businesses \u2014 those directly exposed to tariffs and those who are not \u2014 expect to raise prices this year.\n <\/p>\n \n At the end of 2024, surveyed businesses anticipated increasing their prices by 2.5% during the year ahead. By mid-May, those estimates shot up to 3.5%, according to the Atlanta Fed<\/a>, which found that little difference existed in the price growth expectations of firms with or without foreign exposure.\n <\/p>\n \n However, the survey showed some starker increases expected among services, providing firms, which prompted questions around whether these price increases could deliver an inflationary impulse as was seen three years ago .\n <\/p>\n \n \u201cThe chief concern regarding the impact of tariffs is whether we will experience the same phenomenon that we witnessed during the pandemic. That is, will price pressures spread beyond only the prices that are directly affected by increased import duties?\u201d Atlanta Fed researchers wrote in the report.\n <\/p>\n \n But in the coming months, the expectations are for the tariff passthrough to be gradual and drawn out, Matt Bush, a US economist at Guggenheim Investments, told CNN in an interview.\n <\/p>\n \n \u201cBusinesses say they\u2019re working both with suppliers and consumers to help share some of the cost burden,\u201d Bush said. \u201cThey do indicate that they\u2019re willing to eat some of the cost for now. But I think as the realization sets in that these tariffs are not going back down, they will start to pass more on to consumers.\u201d\n <\/p>\n![\"Shipping](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/08\/gettyimages-2223600784.jpg\")
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