A recent study from Germany reveals a startling truth: US tariffs, a powerful tool in international trade, are predominantly paid by Americans themselves, not foreign exporters. This finding directly challenges President Trump's claims that other countries bear the brunt of these tariffs.
But here's the twist: the study, conducted by the Kiel Institute for the World Economy, discovered that a staggering 96% of the tariff cost is shouldered by American importers and consumers. This means that the very people the tariffs are meant to protect are the ones footing the bill. And this is where it gets controversial—the research suggests that Trump's tariff strategy may not be as beneficial to Americans as he has asserted.
The study analyzed a vast amount of data, examining 25 million shipments worth $4 trillion between 2024 and 2025. It found that US import prices increased almost proportionally to the tariffs, while trade volumes decreased. This 'pass-through' effect means that the tariffs are effectively being paid by Americans, not foreign entities.
This isn't the first time such findings have emerged. Harvard Business School and The Budget Lab at Yale have also indicated that Americans are the ones bearing the cost of tariffs. Even analysts from Deutsche Bank and Bank of America have concurred, stating that the tariffs are impacting American consumers.
The process is straightforward: American importers and wholesalers initially face the tariff cost, which then trickles down to manufacturers and retailers. These businesses must decide whether to absorb the tariff or pass it on to their customers. Ultimately, American consumers face higher prices on both imported goods and domestically produced items that rely on foreign inputs. The study also noted a decrease in the availability of goods in the US market.
Despite this evidence, President Trump has continued to implement tariffs, recently threatening Denmark and other European countries with additional tariffs unless they agree to a deal involving Greenland. However, the legality of some of Trump's tariffs is under scrutiny, with the Supreme Court soon to rule on whether certain tariffs were legally imposed under national security grounds. This decision could significantly impact Trump's trade policies.
So, who really pays for US tariffs? The answer, it seems, is right at home.
