OAKLAND, Calif. – A report, released on Monday by the Kiel Institute for the World Economy, one of the highest rated economic think tanks in the world, says that “foreign exporters did not meaningfully reduce their prices in response to US tariff increases.”
Who’s paying for tariffs?
What we know:
The president said tariffs would bring trillions of dollars to the U.S. Considering the U.S. deficit and debt, so far, it’s a pittance.
Despite claims that foreign exporters sending goods to America would reduce their prices to offset some of the tariff costs, the report says, American consumers and American importers have paid 96% of the tariffs with only 4% paid by foreign exporters.
“I read the news and everything and that we were gonna end up footing the bill and I think that’s exactly what’s been happening,” said Sausalito resident Diane.
“Outside of any constraints upon what people are able to be charged, you know, businesses again will charge whatever the market will bear, basically what is what people will pay,” said Sausalito resident Eric Lieb.
National sales tax?
Terry Connelly is former Dean of the Golden Gate University School of Business. “A national sales tax. That’s exactly what it is. We’re going to continue to pay an awful price as consumers and as merchants in the United States,” said Dean Connelly.
The administration said that the tariffs would reduce the deficit and would possibly allow people, many people, to get a $2,000 check. But, the tariffs have only brought in $200 billion. I say only because of the size of our deficit and our national debt.
Did it improve government finances? The U.S. ran a deficit of about $1.7 trillion in 2025. That’s almost eight-and-a-half times greater than what the tariffs took in for the whole year. So, the impact on just the deficit is minor.
Compared to the U.S. national debt of $38-plus trillion, it is like a firecracker thrown at the sun.
Santa Clara University marketing professor Kirthi Kalyaman sees the $200 billion another way.
“The fact that the number is so small, actually points to the success of American importers finding ways to bring their products into the United States. If they didn’t find other ways to bring their products into the United States, that number would be much, much, much larger,” said Professor Kalyaman.
Finding a workaround
Many, if not most U.S. companies, quickly looked to other, less tariffed countries to bring goods in at small or no extra cost. If that number was larger, I would worry that the American consumer paid a lot.
That would have been reflected in a much higher inflation rate which has really remained muted.