US companies paid nearly 90% of 2025 tariff costs, says NY Fed study

By María Paula Mijares Torres

 

Nearly 90 per cent of the economic burden from tariffs in 2025 was borne by US companies and consumers, according to a new study by economists at the Federal Reserve Bank of New York found. 

 

Using data through November 2025, the study finds that about 94 per cent of the tariff costs were passed through to US firms and consumers in the first eight months of the year.

 

By November, foreign exporters were absorbing slightly more — a 10 per cent tariff was associated with a 1.4 per cent decline in export prices — but pass-through still stood at 86 per cent.

 

 

“This result means that a 10 per cent tariff caused only a 0.6 percentage point decline in foreign export prices,” Mary Amiti, Chris Flanagan, Sebastian Heise and David E. Weinstein wrote in the report. 

 

After April 2 — President Donald Trump’s “Liberation Day,” when he announced expansive new import levies — the average US tariff rate rose sharply from 2.6 per cent to 13 per cent, with a major spike in April and May driven by steep, but temporary, increases on Chinese goods, the study found. Although exemptions and supply shifts lowered the effective duty, the economic burden largely fell on Americans. 

 

These higher costs in tariffs also accelerated supply chain shifts away from China toward countries like Mexico and Vietnam, the study found.

 

The researchers analyzed monthly trade data through November 2025 and used a statistical approach similar to one they applied to the 2018 and 2019 tariffs. Specifically, they compared 12-month changes in foreign export prices with 12-month changes in tariff rates, while controlling for broader product-level and global price trends, allowing them to estimate the direct effect of tariffs on prices.