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.
Yes.
The 2025 US tariffs are an own goal
No, not from the standpoint of the administration.
They want to shift taxes from the wealthy to the poor. That’s what a fair bit of the administration’s policy has been focused on. Tariffs are more-or-less functionally a consumption tax, which is regressive, hits the poor more-heavily than the wealthy.
But Trump said that foreign exporters will pay the tax!
Sure. Shifting taxes from the wealthy to the poor is probably not going to sell politically very well.
If Trump and company announced a national sales tax, which would also be regressive, they’d probably be in hot water politically. Instead, he’s announcing a tax where it’s less-clear who is paying, since it just generates higher prices that aren’t clearly linked to the government, and then insisting that the public isn’t being taxed.
Yes.
No, not from the standpoint of the administration.
They want to shift taxes from the wealthy to the poor. That’s what a fair bit of the administration’s policy has been focused on. Tariffs are more-or-less functionally a consumption tax, which is regressive, hits the poor more-heavily than the wealthy.
But Trump said that foreign exporters will pay the tax!
Sure. Shifting taxes from the wealthy to the poor is probably not going to sell politically very well.
If Trump and company announced a national sales tax, which would also be regressive, they’d probably be in hot water politically. Instead, he’s announcing a tax where it’s less-clear who is paying, since it just generates higher prices that aren’t clearly linked to the government, and then insisting that the public isn’t being taxed.