American importers and consumers bear the cost of 2025 tariffs: analysis

Facts change nothing. This report means nothing. These people still believe. The report is wrong. They are right.

The truth is whatever they want it to be, not something out of their control.

It's sad but true. Deep down, political thinking is influenced by tribal thinking, a rigid us versus them mentality.

This is, after all, how the "divide and conquer" method gets to be so effective. A house divided amongst itself and all that.

Most people I speak to in Canada, Europe and Central America seem perplexed why Americans they know do not seem more alarmed.

"Feelings don't care about your facts." — not Ben Shapiro

Not that it’s necessarily as bad everywhere, but time and time again I talk to people from various countries who say the current leader never could have been elected back when they were living there.

A lot of this, as in the case of Trump, seems like legitimate dissatisfaction that voters have which is funneled into finding alternatives to the people that are currently representing them, without deep thought about the outcomes of the policies the replacement is pushing for. In the case of Trump voters in particular people seem to very frequently be willing to overlook statements they would otherwise disagree with just because there are other statements that align with their thinking, or that seem like “change” that they are willing to support to see where it leads.

   monaco, liechtenstein, singapore, luxembourg, ireland, macau, qatar, bermuda, norway, switzerland

One party state w/ elections: singapore, macau

direct democracy: switzerland

represented democracy: Norway, Bermuda, Ireland, Luxembourg

Multi-party representative democracy is less than half. And none of the top 3. An interesting, but uncomfortable, fact. The people are not good at picking economically rational leaders in adversarial elections.

The age groups who spend the most time on TikTok and Instagram are the least likely to have voted for this administration.

There were populist demagogues getting elected before social media and cell phones, too. This isn’t a modern thing.

I know everyone wants to use this moment in politics to blame their own pet peeves, but blaming social media junkies for this election just isn’t consistent.

We had the same problems before social media. It's not the cause, just a symptom.

> If people stopped spending hours each day scrolling through Instagram, TikTok, and Facebook feeds, media incentives would change.

Many people willingly choose the distraction, they just don't want to bother with politics and stuff. Social Media is just today's most popular distraction at the moment. And Social Media is also useful for those who seek education. It's really more about motivation and presentation than the medium itself.

For that we would need a new funding model for journalism. Local journalism (i.e. local newspapers, radio and TV stations) used to be financed by classifieds and ads. Classifieds are long since gone off to the Internet and ads have been replaced by Google Maps plus Facebook, so there's no monetary stream - and as a result of that, there's barely anyone left holding local politicians and companies accountable. Yes, some places have "citizen journalists" and bloggers, but these usually do not have the funds to pay for legal teams and court proceedings, so they usually only target government stuff.

Something like taxpayer-paid media is way too easily corruptible by the government, just look at Hungary for the worst possible outcome. "Mandatory contribution" systems like the BBC or Germany's public broadcasters aren't that easily corruptible, but it still happens - just watch the shitshow every few years here in Germany when the contribution needs to be raised.

It's an all-around mess.

Example: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4230288

We haven't invented a governance structure yet that would be immune to this, although some are better than others. I'm sure the current social media algorithms are harmful as well. You can ban viral algorithms, but the hostile actors whose literal job it is to drive polarization / populism will just find other strategies to effectively deliver their message.

"Education" is nice and all, but millions of people keep smoking despite the obvious harm and decades of education, not to mention the many limitations, taxes, and bans. I mention smoking as an obviously-bad-thing that everyone knows is bad. Education succeeded, and yet, here we are, still puffing poison. But you can also look already-polarized political topics. There's been no shortage of education on those topics either, but if that worked well enough, we wouldn't be decrying populism right now.

This problem of democracy was already discussed in ancient Greece. Social media might have exacerbated it, but it's not new. Over the millennia, nobody found a valid solution, or at least one that is devoid of other problems.

Education is not the solution, as we are probably the most educated populations in history and we are all still prone to the same problem. And who decides what is the correct education? Every side has their own definition, so there you have another problem.

ie what happens if global demand exceeds supply and a lot of companies have never tried to find other markets because of the inertia required to do so - but if they are pushed by tariffs they find there are alternative customers out there.

As an example - Canada appear to replaced trading food for cars with the US, to food for cars with China.

https://www.facebook.com/TechXnew/posts/canada-has-made-a-de...

it also assumes that there are no other alternative markets to sell to or that supplier capacity is equally elastic; the US might be a high margin market to sell to, but if you only have a fixed amount of product to sell then it makes no sense to eat the high cost of a tariff to keep selling a low margin product when you can instead sell your product at a medium margin in europe

building out more supply for a product is often capital intensive if you want to make it at an economically efficient price point in these times; efficiencies of scale are hard to overcome and a rapid shift of economic policies makes anyone uncertain about future investment so it takes a very long time for these supply chains to rebalance, if they ever do

That's a huge 'if'.

Now I'm neither in the US, American nor Democrat/Republican, but as far as I understand their argument, is that they know it means higher costs for those products for them, and it'll eventually lead to companies wanting to produce things within the border, and only after that is in place, will things actually get cheaper (and better?).

So I think for these people with that perspective, the idea is: everything cheap -> tariffs to make imports expensive > People buy less imports and companies start selling within the border > Eventually things get cheap.

Again, this is just me trying to understand their perspective.

You don't need to be an economist to realize who is getting fucked over. I am not from the US, but a vote for Trump for many was just a vote to burn it all down, especially because the other candidate was perceived to standing for perpetuating the status-quo.

I am not saying I like Trump. In 2016 when he was running for the first time I stood behind the back then very unpopular opinion that he is a fascist and I would have loved to have been wrong about it.

Economists claim to be like physicists, neutral and just observing, but somehow the economically benefitial measures always benefit the few at the cost of the many. Now that has nothing to do with economics per se. Marx was an economist after all. It has to do with how economics are used by the political class.

In fact you will find that in many cases the population will even vote for unpopular measures if they are discussed and understood well ahead of the decision.

But in the end that requires a decent education of the masses, a well functioning and uncaptured media landscape and a certain amount of democratic practise, all of which are missing in big parts of the US.

Democracy is something everybody actively needs to work on, otherwise it withers. If you want to have a nice village it works best if everybody perceives themselves as an agent of creating a nice village. If you want a shit village, you best give everybody the impression it is somebody elses task.

Let's pray we're able to figure it out before more blood is shed.

The most glaring, disqualifying omission is the disregard for FX adjustments. We have not seen the CNY/USD crash yet , but that is because of MASSIVE currency intervention from China to the tune of $200B+ per month: https://x.com/Brad_Setser/status/2012021712012145030

The other wonky thing is they call $200 billion in tariff revenue "a tax" and they also call it a "deadweight loss." Are the authors not the Keynesians I thought they were? At any rate, tariff revenue is not a new tax, but merely a shift in the tax base - since it is $200B that the government does not need to collect elsewhere.

Lastly the collapse of trade volumes from Brazil and India is not a bug it's a feature. Yes supply chains are sticky. The POINT of tariffs is to force supply chain decoupling and reshoring. To "unstuck" the supply chain. Does disruption come with temporary supply shocks? Of course.

The European export growth model is not working for Europe. They are not far behind the US in doing what we are attempting. Canada cozying up to China is not what they wanted for themselves, lol. Etc.

The limitations of the data are highlighted by the authors’ somewhat bizarre claim that “a 10 percentage point increase in tariffs leads to only a 0.39% reduction in export prices.” Yet the luxury industry, a major component of European exporters, reduced prices in 35-40% of all products in 2025 and registered a drop in operating margins from 20% in 2023 to 15% in 2025[2]. European car manufacturers also had to adjust. Porsche reported a billion euro 3Q25 loss and a 99% drop in operating profit through 2025, leading to its removal from the DAX and the CEO’s ouster.[3]

The short answer to who pays: too early to tell. Many consumers balk at price increases and reduce consumption, while many foreign exporters seem to be waiting and seeing for the Supreme Court to rule against the administration’s IEEPA claims or the midterm elections before deciding permanent price changes. But exporters are experienced navigators of multiple tariff layers, both internal and external. Many economists have noted the “value-added tax (VAT) system, a tax on final consumption, which the US administration views as similar to a tariff.”[4]

[1] https://www.spglobal.com/market-intelligence/en/solutions/pr... [2] https://www.ft.com/content/9553baf3-7cfc-40c2-b6bd-1871844af... [3] https://observer.com/2025/10/porsche-profit-drop-luxury-econ... [4] https://think.ing.com/downloads/pdf/article/reciprocal-tarif...

In some cases, the Trump tariffs have actually been so poorly designed that US manufacturing has been hit, because the tariffs on the raw materials and parts are higher than the tariffs on importing finished products from third countries...

The Fed predicted it added 0.5 points to what inflation could have fallen to with the expected effects only partially visible. https://www.stlouisfed.org/on-the-economy/2025/oct/how-tarif...

prices are up so people are buying less, it's just that simple; only a handful of companies have reported their Q4 christmas earnings but retailers' are already forecasted to be way below previous years'

Inflation was on a glide path to the 2% target until the tariffs. Now it's back to ~3% (most say the 2.7% was off b/c of the missing data).

The general economy is also slowing. Job growth has basically cratered, and mass layoffs are increasing. So people have cut spending.

The stock market has provided some cover because of the huge growth from the AI trade.

Commerce Secretary, Howard Lutnick: “The model is clear: 10% tariffs or less are paid by the manufacturers, the distributors, the businesses,” he said. “The consumer doesn’t pay. The consumer doesn’t pay because the seller doesn’t want to raise prices, because if they could, they would, but they don’t want to sell less. So they eat it.”

https://www.zerohedge.com/markets/lutnick-beijing-eating-maj...

I'd get out more, but my tinfoil hat doesn't like the rain.

I mean there were plenty of what would be considered intelligent people that laid out the exact consequences of brexit... problem is the masses don't seem to pay attention to well mannered intelligent people.

First, there have been huge numbers of manufacturing jobs in the U.S. that Americans simply didn’t want to do, so adding more manufacturing jobs they also don’t want to do isn’t going to help the economy. It’s the proverbial, “Americans don’t want to screw tiny screws into iPhones.” situation.

Second, for there to be any prayer of the tariffs working to boost local production (whether staffed or automated), they both cannot be capricious nor can they be applied to the goods and services necessary to acquire and deploy in service of increasing that productive capacity. If the tariffs can be waved around randomly like a threat of grounding a child, then they work only as an instrument of short-term extortion, not as a mechanism to expand an economic base. If the goods and services required for expansion are tariffed, then there’s a giant margin and time-to-ROI disincentive to make the investment as well.

Third, there is absolutely no good reason to apply tariffs to goods and services for which you have no plausible domestic substitute. There’s no point in putting tariffs on bananas and coffee in the U.S. unless what you want is to basically put the equivalent of a “sin tax” on bananas and coffee because you’re weirdly morally opposed to people eating bananas and drinking coffee or something.

Fourth, tariffs don’t ever make domestic equivalents cheaper or more affordable for consumers relative to comparable foreign imports. They just drive the price of all available options up to or near the baseline cost of goods plus the tariff. In the absolute best case scenario where everything about tariffs works out as perfectly as possible, you’re just adding margin for producers.

Trying to be globally competitive economically by using tariffs makes no sense. Trying to improve domestic economic conditions by using tariffs makes no sense. It’s a ridiculously shallow, nonsensical approach to attempting to do either of those things even when they’re used carefully and responsibly, but they were never going to be used carefully and responsibly.

The point of them was always going to be to use them as a means of paying for indulgences and dispensations.

Though perhaps that’s a preferable policy than to re-shore sweatshops and child labor to the U.S. as you’re implicitly suggesting should be done?

I can see how this stance can be justified for imports from countries who do not provide a meaningful minimum wage.

I do not see how this stance can be justified for tariffs on EU countries (where worker rights are strongly protected), especially when the basis for that tariff is to "punish" those countries for not wanting to change national borders against the will of the people inside those borders.

But what about the other side of the coin - that exports will now become more difficult, because of retaliatory tariffs? How does that help your domestic economy?

Trumps solution seems to be to try to bully other countries into accepting tariffs and not imposing tariffs on American goods. But how is this supposed to work? Quite apart from the appalling moral and fairness aspects of this strategy, trashing the economies of other countries is a bad idea, because you want other countries to be wealthy so they can buy stuff from you.

Free trade has built the modern Western world, and has already made the US the world's leading economic superpower. I can't even see what Trump is trying to achieve.

The ultimate problem with your first point---that tariffs boost domestic industry---is that the time horizon for reshoring manufacturing and domestic supply chains is longer than the expected lifetime of these tariffs. Trump is a second term president, there isn't broad consensus or even majority support for the tarrifs, and there is a great deal of opposition from business owners: all signs the tariffs are not for long. Who wants to invest in an expensive factory and workforce when the only thing guaranteeing your competitiveness is the remaining years of Trump? It's actually much worse than this, of course, because the tariffs are being used primarily as diplomatic leverage rather than economic policy, so they change frequently and unpredictably.

There are also serious downsides to the Trump tariffs that don't exist for traditional tariffs that are predictable and operate on a long time horizon. These tariffs create price shocks to domestic industry and retailers, which tend to disproportionately hurt smaller businesses and those with slimmer profit margins. They've also damaged the US's reputation with long-term partners, particularly Canada and the EU, which are now exploring competing trade deals with China and are figuring out how to extract themselves from dependence on US arms and tech companies, two major exports.

The effect of these tariffs is not going to be short-term pain for long-term gain. A great deal of US economic competitiveness comes from investments in diplomatic and military partnerships that have now been undermined. These tariffs will spur reciprocal tariffs from other nations and will accelerate the remodeling of the global economy away from US exports, trading competitive US exports for uncompetitive and commodified domestic industry.

I beg your pardon?!? Who the hell do you think you're talking to? Read my comment again.

"""

Sturmabteilung (SA)

The SA was formed in 1921 as the paramilitary fighting organization of the NSDAP and protected party events. After 1933, under Ernst Röhm, it carried out street violence against Jews, communists, and trade unions, grew to millions of members, but was crushed in 1934 in the Röhm Putsch.

Schutzstaffel (SS)

The SS started in 1925 as Hitler's elite bodyguard under Heinrich Himmler and emancipated itself from the SA. From 1934, it took over police duties, concentration camp guarding, and from 1936, the Gestapo, directing deportations and the Holocaust.

"""

It sends a chill down my spine when I think about this comparison. I recently heard about an ICE agent who tried to drag an indigenous woman out of her car and said to her, “You're next!”

It's depressingly funny too when you ask these people if they've ever been directly affected by said boogeyman and they'll say no, but the know someone that has. Meanwhile you can ask them things about healthcare, local government, and other matters that affect their daily life, and they'll swear the trans-immigrant-boogeyman de jour is has far more affect on their lives.

https://www.census.gov/foreign-trade/balance/c0015.html

2025 deficit is not much smaller 2024 (looks within the normal year to year variance) and 2025’s deficit is still larger than 2023 and 2021.

Definitely not collapsing.

Besides, he started the tariff nonsense in his first term - it even has its own Wikipedia page: https://en.wikipedia.org/wiki/China%E2%80%93United_States_tr...

https://www.bbc.com/news/articles/c209x48ndjpo

I highly doubt you are not purchasing "made in china" or "made in taiwan" products. You likely just don't know. Even your Macbook or GPU card is made in China or Taiwan as are lots of components used inside "made in US" products. Same goes for clothing and shoes, american "brands" made in China, Bangladesh, etc.

Moreover: - you don't have fully-local alternatives for everything - it takes a long time and a lot fo money to build factories for local alternatives - cost of labor is much higher in your country

The end result must be higher prices for everything on your side, and it's starting to show.

>> There are plenty of people around the world that want to come here and are willing to wait in line. I’m perfectly fine with the intentions and methods of the current administration

In the past, I was considering moving to US. I think it would be relatively easy for me (EU citizen, good IT work history). And I visited US couple of times as a visitor. But since Trump and recent ICE "methods", I am honesly scared to even visit US again near-term. I am glad I live in EU.

What you're describing is called "dumping", and it's a strategy China has used to varying degrees of success in other markets in order to destabilize foreign industries. It could be seen as an act of war.

Chinese labor is not actually so cheap anymore, many other developing nations are significantly less expensive. But China's secret weapon is total control and coordination across industries. They use this to subsidize target industries for the export market. You've highlighted automakers, but they also target steel, aluminum, and others. To a casual observer it almost appears as if they were targeting industries that could be readily adapted to wartime production.

If tariffs are a tax on the consumer, then you probably think the tariffs are in fact good ("American's aren't taxed enough").

But I'm more curious about what makes you think Americans aren't taxed enough. Why do you say that and do you have something specific in mind?

The US might have an easy to choice to make after Trump. Regardless of who takes over. Simply roll back tariffs and instantly boost the economy. The protection aspect of tariffs will probably have proven to be mostly counter productive by then.

At least I don't see the US car industry doing any better when it can't export. Coal probably won't ever recover from being obsolete, etc. I think this mostly won't be controversial a few years down the line.

I paid EUR 510, which means $593. This is with all taxes included, so the price without tax would be about $490.

I have searched now the ASUS mini-PC on Newegg, and its cost is $679, around +38.5% more expensive.

This is wild, because indeed, until recently the price of electronics devices was significantly lower in USA in comparison with Europe, while now it is the reverse.

This is not a "Made in China" mini-PC, which might have been affected by worse tariffs.

Moreover, I have equipped the mini-PC with 32 GB DDR5 & 1 TB SSD, while cursing the more than triple price of DDR5 compared with last summer, so that now the DRAM has been more than a third of the price of the complete computer.

This configuration has cost me the equivalent of slightly less than $900, without taxes. The same configuration has a price on Newegg of almost $1200.

In a sense I am happy. All empires decline. This will decline USA forever.

My point is that your thoughtful response about reliable continuity, both inter- and intra- president, is not present in a lot of the comments.

We never accurately measured effect of pedal on the gas trade with China caused with WTO admission nor even NAFTA, the no on ramp was huge shock that didn’t show up in traditional measures. So trying to go full gas reverse with no real strategy is almost mindless.

They deliberately disinformed the public, there is blatant evidence that the news anchors were aware that they were lying. Not just bending facts a little or opining, but knowingly and purposefully lying.

The pretext of freedom of expression, and more narrowly freedom of press should not *continue* to apply to businesses/individuals which are found liable/guilty of such destructive behavior for the society they operate in.

The same should apply to people like Alex Jones, you had your chance to use freedom and you have wasted it, move on to another profession.

It’s true on its surface - most people don’t know about economics, across all political spectrums, and so rely on leaders (which I thought is what liberalism advocates for?).

It’s not a helpful model if you want to understand what’s going on. So then the interesting parts to explore are the reasons they want to believe it, and the reasons given by the educated economists who also support the position

What do you mean by "pass the cost"? Exporters do not pay tariffs, importers do. The exporter doesn't give a shit because it doesn't affect them at all.

This is one of the most fundamental misunderstandings of how tariffs work in the first place. The entity that's picking up the cargo at the port is who literally has to pay CBP for them to release the goods. The middleman (say, Walmart) may pass the cost to customers or whatever, but tariffs are entirely inconsequential and irrelevant to foreign exporters. There's no way to send a bill to a foreign entity demanding a tax for some goods that have arrived at a port, after all.

Tariffs rates by this administration are capricious and punitive, not targeted and strategic.

The only fruit of this is real economic pain for the American consumer. But that was likely the goal, so mission accomplished I guess.

Countries geographically closer to the USA might reason differently because close countries usually trade more and they have more to lose. But even in this case, if a Mexican or Canadian company can find other markets or discovers that it can keep selling at the same price, they will not bear any of the burden of the tariffs.

Russian like sanctions were applied to Italy about 100 years ago because of colonial wars in Africa. Despite the sanctions lasted only 6 months, Italy discovered that they ended up trading less with the usual partners and more with others. Tariffs are somewhat similar to sanctions as they apply friction to trading.

Isn't the only thing that could matter - apart from strategic considerations of financing a loss for a time - if the margins are big enough? Who wants to pay for people to take their products below the full cost of making them, apart from some investor-financed hype startups?

I wonder what supply and demand curves look like if you keep telling people that the increased costs will be paid by foreigners and not them?

I assume it has an impact eventually but it must dampen the speed of response if people believe that.

But, integrally the whole package is just wishful thinking.

I mean, maybe it was elastic for imports from Heard and McDonald Islands. Penguins don't care about margins after all.

First you subsidize and support the creation of currently not commercially viable chip fabs on-shore. Literally handing companies money under some obligation into the future.

Eventually the on-shore chips are produced, but they have higher total cost of ownership for the users: Logistics may be cheaper due to less distance, or more expensive because they are not well-trodden paths yet. Production costs like labor, water, energy could be higher. And the chips could just have higher failure rate, because problems in the new processes need to be kinked out.

But to get local consumers to switch to these switches, one applies tariffs to other sources of chips so the on-shore chips become more competitive artificially, until they become actually cheaper and competitive.

The way it is threatened here isn't in the use case of tariffs at all from my limited understanding.

There are circumstances where much of the burden of increased production costs is borne by the producer. When demand is very elastic (consumers are price sensitive, or there are many good substitutes), and supply is inelastic (its hard to change the level of output), the suppliers will eat the cost.

Out of that price: $3 goes to production cost, $3 goes to tariffs, and $4 goes to profits.

Now the taxes/tariffs are doubled. The producer can up their price to $13, meaning $3 to production, $6 to tariffs and $4 to profit.

But customers might not accept any price higher than $10. They won't buy.

So instead you continue selling for $10 and your costs are: $3 for production, $6 for tariffs and $1 in profit.

That's what people mean when they say that companies are paying the tariffs. They're not profiting as much as before.

In practice it's usually a mix of higher consumer prices, lower company profits, or even some products not being imported anymore.

Which would be a nice balance to the way productivity has rocketed since the late 70s, and has mostly flowed to the top 1%.

Ultimately - and predictably - wealth hoarding becomes economic self-harm. You need distributed prosperity if you want diverse growth and economic and social stability.

Does it change who customers buy food from? No, because everyone increases their prices regardless of if they’re impacted by tariffs or not.

The 2018 washing machine tariffs are a clear cut example of why tariffs are a garbage strategy.

https://www.warrantyweek.com/archive/ww20250522.html#:~:text...

Price Pass-Through: Studies found that 100% of the tariff cost was passed through to consumers, resulting in an estimated $1.5 billion in additional costs to American families in the first year. The "Unexpected" Dryer Rise: Although tariffs only applied to washers, the price of dryers (a complementary good often sold with washers) also rose by an equivalent amount—approximately $92 per unit—as manufacturers increased prices on laundry pairs. Job Creation Cost: While the tariffs helped domestic manufacturers like Whirlpool, LG, and Samsung shift production to the U.S. and create about 1,800 new jobs, researchers estimated that consumers paid over $800,000 annually for each job created. Outcome: The tariffs resulted in a 49% decline in imports from 2017 to 2019. They expired in February 2023, after which washer prices decreased.

It's a national sales tax really.

So when the US is high teens/low 20's average tariff and the rest of the developed world is 0-5%, that's essentially zero as far as market pressure is concerned.

Chinese imports to the US is down to 8% in October 2025, compared to >13% prior to recent trade policy changes. In the same period, EU imports from China have grown 5%. My point remains that US exerting import pressure on China is benefitting the rest of the world's buying power with China, at it's expense.

Which sources would I trust? I feel it's important to read broadly, and (on a long scale) improve your ability to discount biases. To that end, I'm not recommending anything, but everything in proportion.

"There's been major impact to some things" -> so bad things have happened

"but for the most part the economy has hummed along without a blip." -> so despite bad things happening, just plug your ears and sing loudly?

As for prices in Walmart, they HAVE gone up. Several companies have had press releases stating they need to increase prices because of tariffs:

https://www.cnbc.com/2025/05/31/trump-tariffs-here-are-the-r...

"Retailers like Costco and Best Buy said they have already raised some prices, while Walmart, Target and Macy's plan to follow suit"

I'll be the first to say that given the circumstances our underlying economy and people have held up better than complete collapse. But you can't pretend this is not happening.

Also, i was hinting at the fact that issue is larger than economics.

It's also extremely hard to pick winners which is why the Chinese just fund everyone and let the winners cannibalise their less successful competitors. I'd be more confident of Chinese semiconductors being ahead over the medium term than US without ASML.