Do Americans pay for tariffs?

1. Legal incidence vs. economic incidence — who “writes the check” is not the same as who pays

By law the importer of record pays the tariff to U.S. customs, but economic incidence — who actually bears the loss in real income or welfare — depends on market responses: importers can absorb tariffs as lower profits, foreign exporters can cut prices, or U.S. consumers can face higher retail prices; theory therefore predicts a distribution that varies by good and market structure ^{[1] [2] [4]}.

2. Recent empirical evidence: a preponderance of studies point to Americans bearing most costs

Multiple recent studies and surveys argue that the bulk of recent U.S. tariffs has fallen on domestic parties: the Kiel Institute finds importers and consumers absorbed roughly 96 percent of the burden in its shipment-level analysis ^[3]; Bloomberg and regional reporting summarized that finding as Americans paying almost the entire cost ^{[5] [6]}. Complementary research — including Brookings, Tax Foundation literature reviews and the Tax Policy Center — likewise reports that pass‑through to U.S. prices is common, with observed distributions varying across episodes but often leaving U.S. firms and households worse off ^{[2] [1] [4]}.

3. But the burden can shift over time and across goods — the empirical picture is mixed and dynamic

Surveys and market studies through 2025 show a shifting incidence: some analyses (e.g., Goldman Sachs summaries cited by tralac and PIIE) indicated that through mid‑2025 U.S. businesses absorbed much of the cost (about 64 percent in one estimate) while consumers bore less, but by later months pass‑through to consumers appears to have increased substantially, with estimates of consumers bearing as much as two‑thirds or more depending on timing and methodology ^{[7] [8] [2]}. The Boston Fed found small-but-measurable effects on core consumer prices and noted that firms expecting tariffs to persist plan higher pass‑through ^[9].

4. How markets determine who pays — prices, volumes and supplier behavior

Whether exporters cut prices, reduce shipments, or maintain prices and sell less matters: event studies cited by Kiel show exporters often maintained prices and reduced exports in the face of big tariff shocks, meaning U.S. buyers paid the tariff in lost quantity or higher local prices rather than foreign sellers “eating” the duty ^{[10] [3]}. Where products are intermediate inputs, tariffs can depress domestic producer margins or be passed through into higher downstream consumer prices; in concentrated retail markets firms with thin margins may pass through more of the tariff to consumers ^{[2] [11]}.

5. Politics, rhetoric and the reality gap

Political claims that trading partners “pay” U.S. tariffs are longstanding but contested; critics warn that portraying tariffs as foreign-paid revenue ignores the incidence mechanics and ignores distributional and inflationary effects at home ^{[1] [4]}. Policymakers emphasizing tariff revenue understate that revenue may be temporary and that reduced competition and supply-chain adjustments can preserve higher prices for households even after trade patterns change ^{[4] [12]}.

6. Bottom line — a qualified answer

Do Americans pay for tariffs? Yes: empirical and theoretical work show that in many recent U.S. tariff episodes the economic burden falls primarily on American importers, domestic firms and consumers, though the exact split depends on the product, market structure and timing and can shift as firms and suppliers adjust; some studies report earlier absorption by firms with later greater pass‑through to consumers ^{[3] [8] [7] [9]}. Where sources disagree, they tend to differ on magnitudes and timing rather than the broad conclusion that Americans are worse off under large, sustained tariffs ^{[2] [11]}.