Who is paying for Trump's tariffs? So far, it's US businesses.

Gary Clyde Hufbauer (PIIE) and Ye Zhang (PIIE)

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President Donald Trump promised during his recent campaign to impose steep tariffs on other countries, assuring voters that the cost would be paid by foreign sellers, not Americans. In September 2024, for example, Trump told supporters:

“We’re going to be a tariff nation. It’s not going to be a cost to you. It’s going to be a cost to another country…. I heard Kamala the other day, Comrade Kamala. She said, 'Oh, if you do that, he’s raising your taxes.' No. No. No. I’m not raising your taxes. I’m raising China and all of these countries in Asia and all over the world, including the European Union by the way, which is one of the most egregious.” 

Following his inauguration in January, Trump made similar claims as he issued multiple executive orders slapping tariffs on merchandise imports from countries near and far.

But the data suggest that US businesses have absorbed most of the tariff costs through July 2025, not foreign sellers.

This blog post explores the effects of Trump’s tariffs on import prices for these five broad product categories to identify who has borne the costs so far. After all, the tariffs paid by the importers of record have to show up in one of three places: lower prices paid to foreign sellers, smaller spreads earned by US firms between the cost of imported goods and their selling prices, or higher prices paid by US households.

The US government has collected growing revenue from the tariffs paid by US importers, but the prices paid to foreign sellers for many imported consumer goods have changed very little. Meanwhile, American consumers have not yet seen much change in retail prices for most imported goods.

As depicted in figure 1, revenue from US tariffs on five broad categories of imported products, expressed as a percentage of import value, have progressively increased this year through July. The categories are automotive vehicles, parts, and engines; consumer goods; non-auto capital goods; foods, feeds, and beverages; and industrial supplies and materials.