A comprehensive analysis of 25 million shipment records has demolished one of the Trump administration's central economic claims: that foreign countries pay U.S. tariffs. The reality? American consumers and businesses are footing 96% of the bill.
The study by Germany's Kiel Institute for the World Economy analyzed shipment data worth approximately $4 trillion from January 2024 through November 2025, providing the most rigorous quantification yet of tariffs' real-world impact.
"The claim that foreign countries pay these tariffs is a myth," said Julian Hinz, research director at the Kiel Institute. "The data show the opposite: Americans are footing the bill."
The numbers don't lie, but executives sometimes do. And in this case, the numbers are damning.
Foreign exporters absorbed just 4% of tariff costs by cutting prices. Instead of lowering prices to maintain U.S. market share, they simply redirected shipments to other markets. After the Trump administration imposed a 50% tariff on Indian goods in August, exports to the United States collapsed by 18-24%. Export prices barely budged.
This matters because tariffs generated $200 billion in customs revenue over the study period. That's $200 billion extracted from American wallets, not foreign treasuries. It shows up as higher prices at checkout and squeezed corporate margins.
The real economy is feeling it. U.S. manufacturing jobs have declined every single month since April 2025. Between the so-called "Liberation Day" tariff announcements and November, the sector shed 60,000 jobs.
Cui bono? Not American workers. Not American consumers. The tariffs were marketed as economic nationalism but delivered as a regressive tax that hits lower-income households hardest.
The political calculus was simple: tariffs sound tough on foreign competitors. The economic reality is simpler still: they're a self-inflicted wound. When you tax imports, you tax your own citizens. The Kiel Institute's data confirms what trade economists have been saying all along—tariffs are a domestic tax dressed up in nationalist rhetoric.
For corporate America, the implications are clear. If you're passing tariff costs to consumers, your pricing power just became a political liability. If you're absorbing them to maintain market share, your margins are getting crushed. Either way, this isn't the pro-business policy it was sold as.
