The Trump administration has launched a fierce attack on a New York Federal Reserve study claiming US consumers bear 94% of tariff costs. National Economic Council Director Kevin Hassett called the paper "an embarrassment" and "the worst paper I've ever seen in the history of the Federal Reserve System."

Authors Mary Amiti, Chris Flanagan, and Sebastian Heise analyzed tariffs from January 2024 through November 2025, finding that only 6% of costs were absorbed by foreign exporters. The study showed that a 10% tariff led to just a 0.6 percentage-point decline in foreign export prices, with costs largely passed through to US import prices. The analysis noted that by November, the pass-through of costs borne in the US had declined to 86%.

The administration disputes these findings, arguing the study ignores broader economic factors. Hassett pointed to lower inflation and higher wages as evidence consumers are better off, claiming "incomes are up way more than the cost of living." The clash highlights the ongoing debate over who truly pays for tariffs - consumers through higher prices or foreign exporters through reduced demand.