American households and businesses have absorbed nearly 90% of the cost of US President Donald Trump’s tariffs by the end of 2025, according to a new analysis by the Federal Reserve Bank of New York, as reported by USA Today.
Here’s what the report says
The findings add to research that suggests American families are bearing much of the burden from the administration’s import tariffs, despite Trump’s repeated claims that foreign countries bear the cost, USA Today reported.
A Feb. 6 report from the nonpartisan Tax Foundation estimated the tariffs would increase taxes by about $1,000 per household in 2025, with families projected to face an additional $1,300 in costs in 2026, USA Today reported.
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The analysis adds to a growing body of evidence that suggests American households are shouldering much of the impact of the administration’s import taxes, despite Trump’s claims that other countries are paying the price, the USA Today report noted.
Separately, a Feb. 6 study from the nonpartisan Tax Foundation estimated that the tariffs translated into about a $1,000 increase in taxes per household in 2025, with families expected to suffer an additional $1,300 in 2026, USA Today reported.
The research confirms what many economists had predicted — that Trump’s tariffs will largely act as a tax on Americans, the report said.
“The Federal Reserve Bank of New York study confirms what most economists expected: American consumers and businesses are bearing most of the cost of Trump’s tariffs,” said Wayne Winegarden, senior economist at the Pacific Research Institute, a free-market policy group, as reported by USA Today.
Trump’s 2027 defense spending proposal
Earlier this month, the AP reported that Trump proposed increasing the U.S. military budget to about $1.5 trillion by 2027, arguing that the nation faces “troubled and dangerous times.”
“This will allow us to build the ‘military’ that we have long been entitled to, and more importantly, that will keep us SAFE and SECURE, no matter the enemy,” Trump said in a post on Truth Social announcing his proposal.
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The military budget for 2026 is set at $901 billion.
Last year, the U.S. government brought in $288.5 billion from tariffs and other excise taxes, a significant increase from $98.3 billion in 2024, according to the Bipartisan Policy Center, the AP reported.
A study by the Federal Reserve Bank of New York confirms what most economists expected: American consumers and businesses are bearing most of the cost of Trump’s tariffs.
While that represents a significant increase in import tax revenue, it still falls short of funding a number of commitments Trump has made, including taxpayer dividends, reducing the national debt and supporting higher military spending, the AP report said.
(With input from agencies)
Key things
- By the end of 2025, US households have absorbed nearly 90% of the costs from tariffs.
- The tariffs are projected to increase household spending by about $1,000 in 2025 and $1,300 in 2026.
- The findings cast doubt on Trump’s assertion that foreign nations are primarily responsible for the tariff costs.