What's Happening?
A report from the Federal Reserve Bank of New York has revealed that American consumers and companies are shouldering nearly 90% of the costs associated with tariffs imposed by President Trump in 2025.
The data, which spans from January to November 2025, shows that the burden of these tariffs has primarily fallen on U.S. firms and consumers, with 94% of the costs absorbed from January to August, 92% from September to October, and 86% in November. Despite President Trump's assertions that foreign exporters would bear the costs, the report indicates that domestic companies have had to absorb the increased costs or pass them on to consumers. The tariffs have led to increased prices for American consumers, contributing to a decline in consumer confidence.
Why It's Important?
The findings of the New York Fed report highlight the significant economic impact of the tariffs on American businesses and consumers. The increased costs have led to higher prices for goods, affecting consumer spending and confidence. This situation underscores the broader economic implications of trade policies and their potential to influence domestic economic conditions. The tariffs have also sparked political debate, with the House of Representatives passing a resolution to overturn tariffs on Canada due to economic concerns. The ongoing scrutiny of these tariffs could influence future trade policies and economic strategies.
What's Next?
The Trump administration is awaiting a Supreme Court ruling on the legality of the tariffs under the International Emergency Economic Powers Act. This decision could have significant implications for the future of U.S. trade policy. Additionally, the economic impact of the tariffs may continue to be a point of contention in political and economic discussions, potentially influencing future legislative actions and trade negotiations.
