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A comprehensive study by the Kiel Institute for the World Economy reveals that Americans bear nearly the entire burden of US tariffs. The German think tank analyzed over 25 million shipment records worth almost $4 trillion between January 2024 and November 2025, uncovering how tariff costs flow through the economy.
The research found that 96% of tariff costs fall on US buyers, while foreign exporters pay only about 4%. This means the $200 billion increase in customs revenue collected by the US government in 2025 functioned as a tax paid almost entirely by Americans, not by other countries, as often claimed.
The study contradicts messaging from President Donald Trump, who has repeatedly stated that tariff costs would be paid by other countries and overseas exporters. Instead, the data shows what researchers call a “near-complete pass-through” effect, where US import prices rise nearly one-for-one with tariffs while trade volumes contract significantly.
How Tariffs Move Through the Economy
American importers and wholesalers are the first to feel tariff impacts. These businesses face an immediate decision: absorb the additional costs themselves or pass them along the supply chain. Most choose the latter option, creating a ripple effect throughout the economy.
Manufacturers and retailers will receive these increased costs next. They must make similar choices about whether to reduce their profit margins or raise prices for consumers. The pressure to maintain profitability typically wins, meaning costs continue moving forward rather than being absorbed by businesses.
American consumers ultimately face higher prices on two fronts. Imported goods cost more directly due to tariffs, but American-made products also increase in price when they use foreign components or materials. The study found that this has led to more limited availability of goods across US markets.
The Policy’s Broader Impact
Trump’s tariff policies targeted dozens of trade partners during his administration. China, India, and the European Union all faced additional duties as part of an aggressive trade strategy. The president positioned these measures as protecting American interests while generating government revenue from foreign sources.
The Kiel Institute findings align with other research from respected institutions. Studies from Harvard Business School and The Budget Lab at Yale reached similar conclusions about who pays for tariffs. Analysts at Deutsche Bank and Bank of America also confirmed last year that Americans were bearing the costs.
Trump has continued expanding tariff use, recently threatening additional duties on Denmark and other European countries. These threats were tied to demands for a deal transferring Greenland to US control, showing how tariffs remain a preferred tool in his diplomatic arsenal.
What Comes Next
The Supreme Court is expected to rule soon on the legality of numerous Trump tariffs. Many were instituted under an emergency national security law, and legal challenges question whether this authority was properly applied. The decision could undo significant portions of the current tariff policy.
Trump has expressed concern about potential legal setbacks, stating the US would be “screwed” if the tariffs are overturned. This reveals how central tariffs have become to his economic policy framework, despite evidence showing they function primarily as taxes on American buyers rather than foreign exporters.
As the debate continues, the Kiel Institute study provides concrete data about tariff impacts. Whether policymakers will adjust their approach based on this evidence remains uncertain, but the research makes clear who has been paying the bill all along.