US President Donald Trump's aggressive push for trade tariffs on countries not kowtowing to his policies is taking a financial toll on Americans, new research suggests. Nearly all of the revenue raised through last year's tariff hikes came from within the US, a study published by the Kiel Institute for the World Economy shows.
American consumers and importers absorbed about 96 per cent of the added costs, while foreign exporters accounted for only four per cent, the German think tank's report claimed.
It challenges the US president's long-standing claim that foreign countries foot the bill for US trade duties and suggests that Washington may have less leverage than it appears as trade tensions with Europe return to the forefront.
Trump has promoted tariffs as a tool, forcing overseas producers to pay for access to the US market. The relatively strong performance of the US economy last year appeared to support that claim, with growth holding up and inflation remaining contained.
The Kiel Institute's analysis suggests the impact is delayed and not absent. By tracking roughly $4 trillion in global shipments between early 2024 and late 2025, researchers found little evidence that foreign firms lowered prices in response to higher US tariffs. Instead, higher costs were passed along the supply chain or absorbed by US businesses.
Trade volumes declined sharply in response. Indian exporters, for example, kept prices steady but reduced shipments to the US by up to a quarter compared with exporters from the European Union, Canada, and Australia. The result, researchers said, was reduced trade rather than cheaper imports.
The study concludes that US tariffs operate as a domestic tax on consumption rather than a levy on foreign producers. Julian Hinz, a co-author of the report, said the roughly $200 billion in tariff revenue collected last year was “almost entirely paid by Americans,” something that could push inflation higher over time.
Other studies reach similar conclusions. Research from Yale University and Harvard Business School shows that foreign producers carry only a limited share of tariff costs, with most of the burden falling on US importers, retailers, and ultimately consumers.
