Tariffs imposed by the Trump administration on foreign goods have been largely absorbed by American importers, not international exporters.
A new study by a German economic institute shows that almost the full cost of increased duties is being passed on to US businesses and households.
Despite claims that tariffs force foreign companies to pay, the data reveal a different story. Consumers at home are carrying the weight.
Most of the cost stays in the US
The analysis, released by the Kiel Institute for the World Economy, found that American importers are responsible for nearly 96% of the added tariff costs. Foreign exporters, in contrast, have adjusted very little.
Rather than lowering prices to keep their goods attractive, overseas companies maintained pricing levels, leaving domestic buyers to cover the extra charges.
With few reductions in wholesale prices, the increased duties have created a chain reaction.
Importers either absorb the higher expenses or pass them along to US manufacturers, retailers and ultimately, everyday shoppers.
The report underlines that this creates a ripple effect that affects pricing strategies and business margins across multiple sectors.
Targeted countries saw limited price shifts
The study highlighted examples involving Brazil and India, whose exports were subject to significant tariff hikes in 2025.
Brazil faced a 50% duty on certain products, yet exporters there kept prices stable.
India experienced a similar trajectory, beginning with a 25% tariff, which was later doubled.
In both cases, exporters continued shipping goods at previous dollar prices, even after the new tariffs came into effect.
Rather than adjusting prices, the exporting countries responded with lower shipment volumes.
This suggests companies prioritised profit margins over market share.
The report indicated that exporters often choose to reduce sales instead of reducing prices, especially when they have the option to pivot towards less restricted markets.
Trade policy not working as intended
The Kiel researchers used shipping records covering 25 million individual transactions and roughly $4 trillion in trade to compile their findings.
The study contradicts repeated claims from the Trump administration that tariffs function as a revenue tool paid by trading partners.
The data show that these trade measures operate much like a consumption tax within the United States.
Although tariffs do generate significant revenue, around $200 billion, it is US businesses and households who are effectively paying that sum.
Limited pressure on foreign sellers
Despite being a central part of trade strategy in recent years, tariffs appear to have limited power in forcing foreign suppliers to make financial concessions.
Exporters from targeted nations have been able to sidestep price pressures, thanks in part to their access to other global markets.
This undermines a key argument used to promote tariffs as a tool of economic leverage.
Instead of encouraging trade partners to lower prices or offer policy concessions, the tariffs are mostly reshaping domestic pricing structures.
American firms are left to choose between passing costs to customers or absorbing them internally.
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