US tariffs backfire as Americans bear nearly entire cost, says Kiel Institute study
The sweeping tariffs imposed by the United States in 2025 have largely backfired, with American importers and consumers bearing nearly the entire cost, rather than foreign exporters, according to a new policy brief by the Kiel Institute for the World Economy.
The study, titled “America’s Own Goal: Who Pays the Tariffs?”, finds that around 96 per cent of the tariff burden was passed on to US buyers, while foreign exporters absorbed only about 4 per cent, undermining claims that overseas producers or rival countries pay for US tariffs.
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Using shipment-level data covering over 25 million transactions worth nearly $4 trillion, researchers found near-complete pass-through of tariffs to US import prices, meaning higher costs were directly borne by American businesses and households.
As a result, US customs revenue surged by roughly $200 billion in 2025, which the study describes as effectively a tax on Americans, not on foreign producers.
The report highlights that foreign exporters largely did not cut prices in response to higher tariffs. Instead, trade adjusted through sharp declines in volumes, leading to reduced imports, supply-chain disruption, and fewer choices for US consumers.
Event studies examining 50 per cent tariffs on Brazil and 25–50 per cent tariffs on India in August 2025 confirm this pattern. Export prices remained broadly unchanged, while shipments to the US dropped significantly.