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America's own goal: Who pays the tariffs?

Author

Listed:
  • Hinz, Julian
  • Lohmann, Aaron
  • Mahlkow, Hendrik
  • Vorwig, Anna

Abstract

• The 2025 US tariffs are an own goal: American importers and consumers bear nearly the entire cost. Foreign exporters absorb only about 4% of the tariff burden - the remaining 96% is passed through to US buyers. • Using shipment-level data covering over 25 million transactions valued at nearly $ 4 trillion, we find near-complete pass-through of tariffs to US import prices. • US customs revenue surged by approximately $ 200 billion in 2025 - a tax paid almost entirely by Americans. • Event studies around discrete tariff shocks on Brazil (50%) and India (25-50%) confirm: export prices did not decline. Trade volumes collapsed instead. • Indian export customs data validates our findings: when facing US tariffs, Indian exporters maintained their prices and reduced shipments. They did not "eat" the tariff.

Suggested Citation

  • Hinz, Julian & Lohmann, Aaron & Mahlkow, Hendrik & Vorwig, Anna, 2026. "America's own goal: Who pays the tariffs?," Kiel Policy Briefs 201, Kiel Institute for the World Economy.
    • Handle: RePEc:zbw:ifwkpb:336744
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    Cited by:

    1. Gern, Klaus-Jürgen & Kooths, Stefan & Krohn, Johanna & Liu, Wan-Hsin & Reents, Jan, 2026. "Weltwirtschaft im Frühjahr 2026: Nahostkonflikt stört wirtschaftliche Aktivität [World Economy in Spring 2026: Middle East Conflict Hampers Economic Activity]," Kieler Konjunkturberichte 131, Kiel Institute for the World Economy.
    2. Gern, Klaus-Jürgen & Kooths, Stefan & Krohn, Johanna & Liu, Wan-Hsin & Reents, Jan, 2026. "World Economy in Spring 2026: Middle East Conflict Hampers Economic Activity," Kiel Institute Economic Outlook 131, Kiel Institute for the World Economy.

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