NY Fed: Americans are paying for 90% of Trump's tariffs
In an op-ed that he wrote for the Wall Street Journal on Jan. 30, President Trump defended the economic benefits of his tariffs, claiming the “data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen, including large corporations that are not from the U.S.”
Trump's op-ed was aimed at refuting many of the criticisms that the Journal's editorial board has levied against his tariff policies, with the president writing that the "Journal has charged repeatedly that tariffs are nothing but a 'tax' on American consumers, which has proved to be totally false."
"We have proven, decisively, that, properly applied, tariffs do not hurt growth—they promote growth and greatness, just as I said all along," Trump added.
But two new reports tell a much different story about Trump's tariffs than the one the White House is telling.
A new study released by economists from the Federal Reserve Bank of New York and Columbia University found that 90% of the economic burden from Trump's tariffs have fallen on US consumers and firms, stretching back to January 2024 to November 2025.
According to their research, 94% of tariff incidence was borne by the United States during the first eight months of 2025, contradicting Trump's claims that these were falling "overwhelmingly on foreign producers and middlemen."
“In sum, U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025,” the study said.
This suggests that while some foreign countries reduce their prices on exports to the US - which would in turn lower the burden on consumers - this is not always the case.
The pain is especially felt by small businesses: While larger corporations were able to stockpile inventory ahead of the tariffs taking effect and then rely on a more diverse supply chain to manage the impact, smaller firms do not have the scale to lessen the impact of the tariffs through operational maneuvering.
Tariffs cancel out tax cut benefits
Meanwhile, in a Thanksgiving video call with members of the American military back in November, Trump also touted the tax benefits that his tariffs would have on the US because the money that will be coming in as a result of his tariffs "is going to be so large."
"I believe at some point in the not too distant future, you wouldn't even have income tax to pay because the money we're taking in is so great," Trump said. "It's so enormous that you're not going to have income tax to pay. Whether you get rid of it or just keep it around for fun or have it really low, much lower than it is now, but you won't be paying income tax."
However, a new study by the nonpartisan Tax Foundation has found that Trump's tariffs actually undercut any benefits of tax cuts.
In fact, the Tax Foundation had previously estimated that the tax cuts in Trump's One Big Beautiful Bill Act would lower individual taxes by $129 billion, and up to $100 billion of that could go toward refunds, increasing an average tax return of up to $1,000 compared with last year.
But in its latest study, the Tax Foundation found that the average tariff burden for US households was $1,000 in 2025 and is expected to increase to $1,300 this year. In other words, the tariffs are effectively wiping out any benefits from the tax cuts for Americans.
“Tariffs are really holding back the potential of the new tax law, both to deliver relief to taxpayers and to grow the economy,” Erica York, vice president of federal tax policy at the Tax Foundation, said in an interview with Fortune. “The negative impact on investment and on work from the tariffs will really undercut some of the provisions in the new tax law that were designed to boost the economy.”
The Supreme Court is supposed to rule on whether Trump legally used emergency powers granted to the president in the International Emergency Economic Powers Act to justify his tariffs. According to Bloomberg, that ruling is expected to come on Feb. 20.