US consumers will end up paying for more than half of President Trump\u2019s tariffs by the end of the year, according to a note released Sunday by Goldman Sachs economists.\u00a0<\/p>\n
American consumers will shoulder 55% of tariff costs, while US companies will take on 22% and foreign exporters will absorb 18% by slashing prices on their goods, economists including Elsie Peng and David Mericle wrote in the note.<\/p>\n
\u201cUS businesses are likely bearing a larger share of the costs\u201d as they aim to raise prices gradually, the economists said.<\/p>\n
US consumers will bear the brunt of President Trump\u2019s tariffs, according to Goldman Sachs economists. REUTERS<\/p>\n
\u201cIf recently implemented and future tariffs have the same eventual impact on prices as the tariffs implemented earlier this year, then US consumers would eventually absorb 55% of tariff costs.\u201d<\/p>\n
The wide-ranging levies will likely hike the inflation rate to 3% \u2013 well above the Fed\u2019s 2% goal \u2013 by December, according to the note.<\/p>\n
Trump\u2019s tariffs have already pushed core personal consumption expenditure prices \u2013 which are used in the Fed\u2019s key inflation reading \u2013 up by 0.44% so far this year, the economists wrote.<\/p>\n
\u201cThe President and Administration\u2019s position has always been clear: while Americans may face a transition period from tariffs upending a broken status quo that has put America Last, the cost of tariffs will ultimately be borne by foreign exporters,\u201d White House spokesman Kush Desai told The Post in a statement. <\/p>\n
\u201cCompanies are already shifting and diversifying their supply chains in response to tariffs, including by onshoring production to the United States.\u201d<\/p>\n
Trump has insisted that foreign nations will eat the bulk of the tariffs. But the import taxes are directly paid by US firms during the customs process. <\/p>\n
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Foreign companies absorb tariff costs when they slash their prices to remain competitive and hold onto market share.<\/p>\n
However, Goldman\u2019s analysis is hinged on a sizable \u201cif,\u201d since Trump\u2019s tariffs are constantly evolving during trade talks with foreign nations.\u00a0<\/p>\n
Most recently, Trump threatened a \u201cmassive increase\u201d of duties on China to 100%<\/a> as he accused the nation of \u201cbecoming very hostile\u201d in its rare earth restrictions. Goldman\u2019s latest analysis does not include this new rate on China.<\/p>\n Trump has insisted that foreign nations will eat the bulk of the tariffs. REUTERS<\/p>\n Goldman has already lowered its projected tariff impact from its analysis in August<\/a>. At the time, it wrote that consumers had absorbed just 22% of tariff costs thus far, but predicted their share would jump to 67%.<\/p>\n Trump blasted Goldman and its CEO David Solomon<\/a> over the report, which claimed US consumers would end up bearing the brunt of the tariffs once they finished working their way through the economy.<\/p>\n<\/p>\n \u201cThey made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong, just like they are wrong about so much else,\u201d the president wrote in a Truth Social post after the August report\u2019s release.<\/p>\n Economic data has been on hold amid the government shutdown, which entered its thirteenth day on Monday. But some furloughed employees are reportedly being called back to help release September\u2019s inflation report<\/a> on Oct. 24, nine days after it was initially due.<\/p>\n Trump\u2019s tariffs are constantly evolving during trade talks with foreign nations.\u00a0 REUTERS<\/p>\n So far, the Bureau of Labor Statistics has missed its deadline for the release of a highly-anticipated monthly jobs report.\u00a0<\/p>\n Economists and policymakers have been closely monitoring employment data, especially as some Fed officials cite a slowing labor market to justify further interest rate cuts.<\/p>\n