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.
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. Indian customs export data showed exporters maintained prices but reduced volumes, reinforcing the finding that exporters did not “eat” the tariffs.
The Kiel Institute argues that tariffs function as a selective consumption tax, transferring wealth from American consumers and firms to the US Treasury, rather than extracting concessions from trading partners.
“For every $100 collected in tariff revenue, roughly $96 comes out of American pockets,” the study noted, adding that the economic cost goes beyond revenue through distorted consumption, supply-chain disruptions and reduced product variety.
The findings echo earlier research from the 2018–19 US-China trade war, when import prices rose almost one-for-one with tariffs while exporter prices remained stable. Despite the broader scope and higher rates of the 2025 tariffs, the underlying dynamics have not changed, the study said.
The report concludes that claims that “foreign countries pay US tariffs” are largely a myth, warning that such policies raise costs for domestic firms, hurt consumers, and weaken supply chains without delivering the promised economic gains.
“The tariffs are, in the most literal sense, an own goal,” the authors said, arguing that Americans ultimately foot the bill.
