Americans paid 96% of 2025 tariff burden, study finds

Key Concepts

• Tariffs: Taxes imposed on imported goods.
• Tariff Burden: The economic impact of tariffs, specifically who ultimately pays for them (importers, exporters, consumers).
• Keel Institute for the World Economy: Research institution conducting the primary study discussed.
• Inflation: A general increase in prices and fall in the purchasing value of money.
• Import Volume: The quantity of goods imported.

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Tariff Revenue & Burden Distribution – Keel Institute Study

A recent study by economists at the Keel Institute for the World Economy analyzed the revenue generated by US tariffs over the past year and determined the distribution of the tariff burden. The findings reveal that the vast majority – 96% – of the tariff burden is borne by American importers. Specifically, of the $200 billion in tariff revenue collected by the US government in the last year, approximately $192 billion was paid by US entities including wholesalers, retailers, manufacturers, and ultimately, direct consumers. This signifies that the intended target of the tariffs – foreign exporters – only absorbed 4%, or $8 billion, of the cost through reduced profits.

The study demonstrates that foreign exporters are largely not adjusting their prices to offset the tariffs. Instead, the primary response has been a reduction in the volume of goods exported to the United States. This is illustrated by the example of India, where shipments to the US decreased by up to 24% following the implementation of a 50% tariff rate, compared to countries not subject to similar taxes.

Impact on Inflation & Consumer Prices

While initially, importers and manufacturers largely absorbed the tariff costs without immediately passing them on to consumers, evidence suggests a growing impact on prices. A Harvard Business School study conducted in November indicated that tariffs have contributed to a 0.7% increase in inflation since March. Furthermore, imported goods are now approximately 6% more expensive than they were in 2024. This suggests a delayed, but definite, pass-through of tariff costs to the consumer level.

Potential Legal Challenges & Amazon’s Observations

The US’s tariff policy, significantly altered in 2025, faces potential reversal through a legal challenge. The Supreme Court is expected to rule soon on a case brought by small businesses contesting the legality of President Trump’s tariffs. This case could potentially undo some of the implemented tariff measures.

Adding to the discussion, Amazon CEO Andy Jassy publicly stated that President Trump’s tariffs are beginning to be reflected in the prices of certain items sold on the platform, as sellers grapple with absorbing the increased costs. This observation reinforces the findings of the Harvard Business School study and highlights the real-world impact of tariffs on the retail market.

Logical Connections & Synthesis

The presented information establishes a clear connection between tariff implementation, the distribution of economic burden, and the resulting inflationary pressures. The Keel Institute study provides quantitative evidence demonstrating that tariffs are primarily paid for by American businesses and consumers, contradicting the expectation that foreign exporters would bear the brunt of the cost. This, coupled with the Harvard Business School’s findings on inflation and Amazon’s CEO’s statement, paints a picture of tariffs as a policy with unintended consequences for the US economy. The pending Supreme Court case introduces an element of uncertainty regarding the future of these policies.