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A new economic study finds that the United States’ latest round of tariffs has functioned less as a penalty on foreign exporters and more as a domestic tax, with American consumers and businesses absorbing <a href="https://yellow.com/news/will-the-supreme-court-spark-bitcoins-breakout-dollar150b-tariff-case-has-traders-on-edge" rel="noopener noreferrer nofollow">nearly the entire cost.</a>Research <a href="https://www.kielinstitut.de/publications/americas-own-goal-who-pays-the-tariffs-19398/" rel="noopener noreferrer nofollow">published</a> by the Kiel Institute for the World Economy analyzes shipment-level trade data from more than $25 million individual transactions valued at nearly $4 trillion.The authors conclude that tariffs introduced in 2025 were passed through almost completely to U.S. buyers, undermining claims that overseas producers would bear the burden.<h2 id="tariffs-passed-almost-entirely-to-u-s-buyers">Tariffs Passed Almost Entirely To U.S. Buyers</h2>According to the report, “American importers and consumers bear nearly the entire cost.Foreign exporters absorb only about 4% of the tariff burden, the remaining 96% is passed through to U.S. buyers.”The data show import prices rising almost one-for-one with the tariffs, a pattern economists associate with near-complete pass-through.Rather than lowering prices to protect market share, exporters largely held firm.<blockquote>“exporters maintained their prices and reduced shipments. They did not ‘eat’ the tariff.”</blockquote><h2 id="export-volumes-fall-as-prices-hold-steady">Export Volumes Fall As Prices Hold Steady</h2>The study includes event analyses of tariff shocks targeting Brazil and India, where duties reached as high as 50%.In both cases, export prices showed little to no decline after the tariffs were imposed.Instead, trade volumes contracted sharply as exporters redirected goods to other markets.Also Read: <a href="https://yellow.com/news/trump-ties-greenland-threat-to-nobel-snub-in-letter-circulated-to-european-governments" rel="noopener noreferrer nofollow">Trump Ties Greenland Threat To Nobel Snub In Letter Circulated To European Governments</a>Indian customs data reinforce the findings, showing that exporters facing U.S. tariffs adjusted by reducing shipments rather than accepting lower margins.The researchers argue this behavior contradicts the political narrative that tariffs force foreign producers to make concessions.Customs Revenue Rises, But Households Foot The BillWhile the tariffs generated a surge in U.S. customs revenue of approximately $200 billion in 2025, the report stresses that this windfall came at a domestic cost.“U.S. customs revenue surged by approximately $200 billion in 2025—a tax paid almost entirely by Americans,” the authors write.The study characterizes tariffs as economically equivalent to a consumption tax, with costs ultimately borne by U.S. firms and households rather than foreign governments or exporters.<h2 id="broader-economic-damage-ahead">Broader Economic Damage Ahead</h2>Beyond higher prices, the report warns of longer-term consequences, including disrupted supply chains, reduced consumer choice, and lower trade volumes.These distortions, the authors argue, risk weighing on productivity and growth over time.The report further stated that the 2025 tariffs represent a self-inflicted economic setback, delivering higher prices at home while failing to impose meaningful <a href="https://yellow.com/news/trump-seeks-dollar1b-entry-fee-for-board-of-peace-with-veto-power" rel="noopener noreferrer nofollow">pressure on foreign exporters. </a>The findings add to a growing body of evidence that protectionist trade policies often undermine domestic welfare <a href="https://yellow.com/news/analysts-warn-trump-tariff-demand-for-greenland-purchase-risks-dollar-reserve-currency-status" rel="noopener noreferrer nofollow">despite their political appeal.</a>Read Next: <a href="https://yellow.com/news/how-prediction-markets-are-becoming-the-next-derivatives-and-insurance-layer" rel="noopener noreferrer nofollow">How Prediction Markets Are Becoming The Next Derivatives And Insurance Layer</a>

Study Shows Americans Pay 96% Of US Tariff Costs Not Exporters

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