A new report from the Federal Reserve Bank of New York concludes that U.S. businesses and consumers absorbed roughly 90 percent of the economic burden stemming from President Trump’s sweeping tariffs in 2025, undercutting earlier assurances that foreign exporters would shoulder the impact.
The study, released Thursday, examined tariff-related price data across the first 11 months of the year. Researchers found that in the initial eight-month stretch, American firms and households were bearing as much as 94 percent of the added costs tied to import taxes. While the pass-through rate eased later in the year indicating that foreign exporters began absorbing a larger share–the overall burden remained concentrated domestically.
“U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025,” the study’s researchers wrote in a blog post published alongside the report.
According to the findings, the average tariff rate in 2025 climbed sharply, rising from 2.6 percent to 13 percent over the course of the year, with only limited fluctuations. The increase in duties translated into higher import prices, which were largely passed along the supply chain to American buyers rather than offset by foreign producers.
The report directly contradicts previous claims that foreign companies would ultimately pay the import taxes. Instead, the data suggest that domestic companies importing goods, along with consumers purchasing those products, absorbed the overwhelming majority of the financial impact.
The findings arrive amid mounting political pressure over the administration’s trade strategy. President Trump has recently threatened additional tariffs on Canada and several European nations, though some of those proposals were later scaled back. On Wednesday, a group of House Republicans joined an effort to block tariffs targeting Canada, signaling growing unease within the president’s own party.
In response, Trump warned dissenting lawmakers of political repercussions. “Any Republican, in the House or the Senate, that votes against TARIFFS will seriously suffer the consequences come Election time, and that includes Primaries!” the president wrote in a Truth Social post Wednesday evening.
The New York Fed’s conclusions align with other recent economic analyses showing that U.S. businesses and consumers have carried more than 90 percent of the tariff burden.
Economists say the findings are likely to intensify debate in Washington over the long-term costs and benefits of the administration’s aggressive trade policy, particularly as lawmakers weigh new tariff proposals and potential legislative limits.
