Research has found that the cost of tariffs is mainly borne by Americans.

A new study shows that it is Americans, not foreigners, who bear almost all of the costs of US tariffs. This conclusion contradicts a key assertion of US President Donald Trump and suggests that Trump may have less leverage in the escalating trade war with Europe. Trump has repeatedly claimed that the historic tariffs he implemented last year would be paid for by foreigners, using tariffs as both a revenue tool and a diplomatic tool. These claims have helped strengthen Trump's bargaining power and encouraged foreign governments to reach agreements with the US. The highly respected Kiel Institute for the World Economy in Germany released this new study on Monday, showing that the impact of tariffs may manifest over time in the form of rising consumer prices in the US. By analyzing freight data worth $4 trillion from January 2024 to November 2025, researchers at the Kiel Institute found that foreign exporters only absorbed about 4% of the costs by lowering prices in response to the tariffs imposed by the US last year, while American consumers and importers absorbed the remaining 96%. The report suggests that these tariffs are effectively a consumption tax imposed on Americans, rather than being targeted at foreign producers.