U.S. Tariffs Drive Up Consumer Costs, Economists Say, Despite Trump’s Claims
New analysis from economists suggests that tariffs imposed by the Trump administration are primarily impacting American consumers and businesses through higher prices, rather than penalizing foreign countries as the former president often claimed. While the exact impact is debated, the consensus among many economists is that the burden of these tariffs falls largely on U.S. households.
The tariffs, which have significantly increased the average U.S. tariff rate, are paid by U.S. import companies. These companies typically pass on the increased costs to consumers in the form of higher prices for imported goods. While this can pressure foreign exporters to lower their prices or risk losing market share, evidence suggests that overseas companies have absorbed only a fraction of these rising costs.
Economists at Goldman Sachs estimate that foreign exporters have shouldered approximately one-fifth of the increased costs associated with tariffs, with the majority of the financial burden falling on American consumers and businesses. This dynamic means that everyday items, many of which are not manufactured in the United States, have seen price increases.
companies such as walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel, and Stanley Black & Decker have all cited U.S. tariffs as a reason for raising their prices. This trend affects a wide range of products, from apparel like sneakers and knapsacks to electronics such as televisions and video game consoles, as well as household appliances.
The impact of these tariffs is also seen as disproportionately affecting lower-income households, as they tend to spend a larger percentage of their income on essential goods that are subject to price increases. The Budget Lab at Yale University reports that the average U.S. tariff rate has risen from 2.5% at the beginning of 2025 to 18.3% currently, the highest level seen as 1934. This increase is estimated to cost the average American household an additional $2,400 annually.
The effectiveness and economic consequences of these trade policies remain a subject of ongoing discussion among economists and policymakers.
