Costs from Trump's tariffs paid mainly by US firms and consumers, NY Fed says

February 13, 2026

Research from the Federal Reserve Bank of New York reveals that tariffs imposed in 2025 by President Trump caused the average tariff rate on imports to surge from 2. 6% to 13%, with US companies and consumers bearing approximately 90% of these increased costs. Rather than reducing prices to maintain US market demand, exporters from countries like Mexico, China, Canada, and the European Union maintained their pricing, forcing American importers to pass the additional expenses onto shoppers.

Who is affected

US companies importing goods
American consumers and households (average impact of $1,000-$1,300 per household)
Exporters from Mexico, China, Canada, and the European Union (through reduced trade volumes)
Exporting countries like Brazil and India (experienced collapsed trade volumes)

What action is being taken

President Trump has imposed tariffs on goods from Mexico, China, Canada, and the European Union
US importers are increasing prices to shoppers in response to tariff costs
Exporters are maintaining their prices rather than lowering them
Exporters are cutting the amount of goods shipped to the US

Why it matters

The tariff increases represent the highest average tariff rate since 1946, fundamentally contradicting the stated goal that exporting countries would bear the cost. Instead, the economic burden falls almost entirely on American businesses and consumers, effectively functioning as a significant tax increase on US households. The research demonstrates that any economic gains from Trump's tax cut legislation in the "Big Beautiful Bill" will be completely offset by these tariff costs, undermining the administration's broader economic policy objectives.

What's next

No explicit next steps stated in the article

Read full article from source: BBC