NY Fed Says: Costs of Trump Tariffs Were Paid by American Businesses and Consumers

As President Donald Trump changed tariff agreements with various countries, one thing remained constant: products became more expensive for American businesses and consumers.

In a survey released Thursday by the Federal Reserve Bank of New York, a group of analysts and economists found that by 2025, the average tariff rate on imported goods rose to 13%, up from just 2.6% at the beginning of the year.

The Federal Reserve Bank of New York found that 90% of the cost of the increase in tariffs, imposed by Trump on products from Mexico, China, Canada and the European Union, was paid by American companies.

“U.S. businesses and consumers will continue to bear most of the economic burden of high tariffs imposed in 2025.”

With the change and increase in customs duties last year, exporting countries did not reduce the cost of products in an attempt to avoid a drop in US demand.

Instead, exporters kept prices unchanged, passing on the cost of tariffs to any company that imported their products, which in turn responded by increasing the price of those products for consumers.

The reaction from exporters in 2025 was essentially the same as in 2018, when Trump imposed certain tariffs during his first term: the cost of goods for consumers rose, with little other economic impact recorded, the New York Fed said at the time.

The results released on Thursday coincide with research from other recent analyses.

The Kiel Institute for the World Economy, an independent research firm in Germany, said in a report released last month that it found “almost complete transmission of tariffs to U.S. import prices.”

Kiel researchers analyzed 25 million transactions and found that in exporting countries such as Brazil and India, the price of goods from those countries did not decrease.

“Instead, trade volumes collapsed,” the Kiel report said, meaning exporters chose to reduce the amount of goods sent to the US rather than lower prices.

The National Bureau of Economic Research also found that the transfer of tariffs was “nearly 100%,” meaning the U.S. is paying for the price rise, not the exporting countries.

Similarly, the Tax Foundation, a Washington, D.C.-based think tank focused on U.S. tax policy, found that increasing tariffs on goods in 2025 would increase costs for all American families.

In defining the tariffs as a new tax on consumers, the Tax Foundation said the 2025 increases will cost the average family $1,000 (£734.30). In 2026, fares will cost the same family $1,300.

The Tax Foundation said that even the “effective” tariff rate, an average rate that takes into account reduced purchases in response to rising prices, is now at 9.9%, making it “the highest average rate since 1946.”

With such impacts on people, the Tax Foundation has stated that any economic benefits from the tax cuts included in Trump’s “Big Beautiful Bill” will be completely nullified.

Originally published by BBC News on 02/12/2026

Por Kali Hayes