Trump Tariffs Backfired, Burdening US Importers, NY Fed Says

Study finds 94% of economic burden from 2025 tariffs fell on American businesses and consumers.

Published on Feb. 13, 2026

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A report by the Federal Reserve Bank of New York found that American businesses and consumers, rather than foreign exporters, shouldered nearly the entire financial weight of the 2025 tariffs imposed by the Trump administration. The study showed that for the majority of the year, the 'economic burden' of the tariffs did not shift abroad, with 94% of the tariff incidence borne by the U.S. in the first eight months.

Why it matters

The findings challenge the rationale behind the Trump-era tariffs, which were intended to protect American jobs and industries by making foreign goods more expensive. Instead, the data suggests the tariffs primarily hurt domestic firms and consumers, while failing to significantly lower prices from foreign exporters.

The details

Over the course of 2025, the average U.S. tariff rate surged from 2.6% to 13%, yet foreign prices failed to drop significantly to compensate for the hike. As costs climbed, U.S. companies aggressively reorganized their supply chains to avoid the most heavily taxed regions, with China's share of U.S. imports falling below 10% - a historic low. Meanwhile, Mexico and Vietnam emerged as the primary beneficiaries, gaining significant market share as importers fled high-tariff Chinese goods. The researchers concluded that the promised relief from foreign price cuts never fully materialized, with U.S. firms and consumers continuing to bear the bulk of the economic burden.

  • In early 2025, China faced duty spikes as high as 125 percentage points.
  • By November 2025, the pass-through rate had dropped to 86%, but the overall trend remained lopsided.

The players

Federal Reserve Bank of New York

The regional Federal Reserve bank that conducted the study on the impact of Trump-era tariffs.

Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein

Economists who authored the report on the tariffs' economic burden.

China

The primary target of the tariffs, whose share of U.S. imports fell below 10% in 2025.

Mexico and Vietnam

Emerging as the primary beneficiaries, gaining significant market share as importers fled high-tariff Chinese goods.

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What they’re saying

“94 percent of the tariff incidence was borne by the U.S. in the first eight months of 2025.”

— Economists (Federal Reserve Bank of New York)

“U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.”

— Researchers (Federal Reserve Bank of New York)

What’s next

The findings of the report are likely to fuel further debate over the effectiveness and impact of the Trump administration's trade policies, with potential implications for future trade negotiations and economic policy decisions.

The takeaway

The data from the Federal Reserve Bank of New York study suggests that the Trump-era tariffs, intended to protect American jobs and industries, ultimately backfired by primarily burdening domestic firms and consumers rather than foreign exporters, undermining the rationale behind the tariffs.