A recent analysis from Goldman Sachs, highlighted in a tweet by trade economist Scott Lincicome, indicates that U.S. consumers are projected to bear the brunt of tariff effects, with price increases expected to reach 70% through the fall of 2025. The preliminary findings, covering the period through June 2025, suggest a significant burden shift away from foreign exporters.
According to the analysis, foreign exporters have absorbed only 14% of U.S. tariffs, while U.S. companies have borne a substantial 64% of the costs. U.S. consumers absorbed the remaining 22% of the tariff burden during this initial period. The tweet further stated, "Protected US companies also raised prices," contributing to the escalating costs for consumers.
Economic experts widely agree that tariffs often translate into higher prices for domestic consumers and increased costs for businesses. The Tax Foundation notes that tariffs can amount to a significant tax increase per U.S. household, with estimates suggesting a loss of purchasing power. The Yale Budget Lab's research supports this, indicating that tariffs lead to consumer price increases and a reduction in household purchasing power.
The impact of tariffs extends beyond direct price increases, affecting the broader economy. JPMorgan's chief global economist, Bruce Kasman, has stated that tariff costs are primarily borne by U.S. consumers, leading to depressed growth. Deloitte also highlighted that tariffs are likely to raise inflation without necessarily increasing domestic production, potentially slowing the pace of Federal Reserve rate cuts.
Goldman Sachs Research has consistently analyzed the broader economic implications of tariffs, forecasting potential drags on GDP growth and shifts in inflation. While some tariffs might be negotiated lower over time, the uncertainty surrounding trade policy continues to impact business investment and consumer sentiment, as noted in various Goldman Sachs reports. The latest findings underscore the ongoing challenge of cost distribution within the U.S. economy due to tariff policies.