New research from the Federal Reserve reveals that US businesses and consumers paid nearly 90 percent of the cost of Donald Trump's tariffs in 2025, contradicting the president's claims that foreign companies would bear the burden. The New York Fed study found that the majority of tariff costs were passed through to Americans during the first 11 months of the year.

The study shows that in the first eight months of 2025, 94 percent of tariff costs were passed to US importers, falling slightly to 92 percent in September-October and 86 percent in November. While foreign exporters shouldered an increasing portion as the year progressed, the bulk of the economic burden continued to fall on American firms and consumers. This finding aligns with other recent studies, including a German Kiel Institute report showing a 96 percent pass-through rate.

Despite Trump's assertion that "billions of dollars" would flow into the US from countries that had "taken advantage" of America, the reality shows a different picture. The tariffs amounted to an average tax increase of $1,000 per household in 2025, rising to $1,300 in 2026 according to the Tax Foundation. While inflation impacts were more muted than feared, with the consumer price index dropping from 3 percent to 2.7 percent, the study confirms that American consumers ultimately foot most of the bill for the administration's trade policies.