New study shows 96% of all U.S. tariff costs are passed straight to American buyers
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Tariffs = higher prices here. About 96% of tariff costs get passed to U.S. shoppers, not foreign countries.
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Everyday goods get hit. Even Made in USA products can cost more if they use imported parts or materials.
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Less competition, fewer deals. Tariffs shrink imports, which means fewer choices and less pressure to keep prices low.
A new report out from the Kiel Instituteconfirms what many shoppers have already felt at the checkout line: U.S. tariffs are largely being paid by Americans, not foreign countries.
After analyzing more than 25 million shipment records worth nearly $4 trillion, the Institute found that roughly 96% of the cost of U.S. tariffs ends up with American importers and consumers, while foreign exporters absorb only about 4%. In other words, tariffs are functioning much more like a domestic tax than a penalty paid overseas.
That directly contradicts long-standing claims from President Trump, who has repeatedly argued that tariffs are paid by other countries. According to the researchers, theres been a near-complete pass-through, meaning import prices rise almost dollar-for-dollar with the tariffs imposed.
Why tariffs hit consumers faster than you think
Tariffs dont usually show up as a separate line item on your receipt. Instead, the cost quietly moves through the supply chain.
First, American importers and wholesalers pay the tariff when goods enter the country. From there, manufacturers and retailers face a choice: eat the extra cost or raise prices.
In most cases, at least part of that cost gets passed on to shoppers. Even products labeled Made in the USA arent immune if they rely on foreign parts, materials, or packaging.
The Kiel Institute also found that tariffs dont just raise prices, but they reduce availability. This meansfewer choices on store shelves and less competition to keep prices in check.
What shoppers can do to limit the damage
While consumers cant control trade policy, there are ways to soften the impact of tariff-driven price increases.
Buy before prices reset.
Retailers dont always raise prices immediately. When tariffs hit, stores often sell through existing inventory first.
If you know youll need products like appliances, electronics, furniture, or auto parts in the next few months, buying sooner rather than later can help you lock in pre-tariff pricing.
Watch imported everyday categories.
Tariffs dont just affect big-ticket items. Household goods, clothing basics, cookware, and even packaged foods can creep up in price.
Keep an eye on the stuff you buy regularly and if you notice a quick price jump, its often tariff-related rather than simply inflation.
Compare private labels vs. national brands.
Store brands sometimes rely on different suppliers and may not be affected the same way as the more expensive name brands.
For this reason, this could serve as a great time to try out some store brands like Kirkland at Costco, Members Mark at Sams Club, and up&up at Target.
Be skeptical of temporary price hikes.
Tariff-related increases have a habit of sticking around even if policies change. If a price spikes and never comes back down, its a sign the cost has been baked into the supply chain. Thats your cue to shop competitors or reconsider the purchase altogether.
Delay nonessential upgrades.
When tariffs affect a stores ability to get a product, they will obviously be less likely to offer a discount on that item.
So, if an item is not an urgent need or want, waiting a little bit can help you avoid paying peak pricing during these supply shortages.
Why this story isnt over yet
Some of these tariffs could still be overturned. The Supreme Court is expected to rule soon on whether certain tariffs imposed under emergency national security authority were legal. A reversal could unwind parts of the policy, or potentially spark new ones.
Until then, tariffs remain a hidden cost that shows up slowly and often without explanation. The key takeaway from the Kiel Institutes research is simple: when tariffs rise, American prices usually follow.
For consumers, the smartest response typically isnt panic buying. Instead, pay a little closer attention to pricechanges, pivot to store brands when possible, and stock up when the price is right.
Posted: 2026-01-26 16:58:44
