President Donald Trump’s tariffs have raised billions of dollars since he implemented them in January. Who pays for those has been hotly debated inside and outside of the Washington D.C. beltway.
The latest finding saying American consumers bear that cost has the White House lashing out.
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White House economic advisor Kevin Hassett on Wednesday criticized a recent New York Federal Reserve paper that found U.S. consumers are paying for the majority of the president’s 2025 tariffs.
What Hassett said
In an interview with CNBC, Hassett said those who worked on the report should be “disciplined.”
“The paper is an embarrassment,” Hassett said. “The people associated with this paper should presumably be disciplined, because what they’ve done is they’ve put out a conclusion which has created a lot of news that’s highly partisan based on analysis that wouldn’t be accepted in a first-semester econ class.”
In the report, researchers looked at tariffed countries to see whether they were lowering prices or raising them so U.S. consumers and businesses would bear the cost.
Nearly 90% of the time, Fed analysts found that the tariffs were ultimately passed on to U.S. consumers.
Hassett, however, insisted that tariffs have had little impact on prices and noted that costs have actually fallen.
“Prices have gone down. Inflation is down over time. Import prices dropped a lot in the first half of the year, that leveled off, and real wages were up $1,400 on average last year, which means that consumers were made better off by the tariffs,” he said.
He noted that if the paper were correct, consumers would not have been made better since the tariffs were implemented.
Similar study
A policy report by the German Kiel Institute for the World Economy had similar findings, as Straight Arrow News previously reported.
It found that American importers and consumers paid 96% of Trump’s tariffs, while countries importing the goods only paid 4%.
“Exporters are not cutting prices to maintain sales,” researchers wrote, “Instead, they are accepting reduced market share in the United States while maintaining their profit margins.”
Researchers found four reasons why other countries may not be absorbing more of the cost. A lack of alternative markets, cutting prices may not help, exporters won’t make costly changes if they think the tariffs are temporary, and supply chains are simply ”sticky.”
