American households are shouldering the majority of costs from former U.S. President Donald Trump's tariffs, according to a Goldman Sachs analysis released this week. With new duties on furniture and lumber now active, researchers project consumers will pay 55% of tariff-related expenses in 2024, rising to 70% by late 2025.
The investment bank's breakdown shows 22% of costs absorbed by U.S. businesses and 18% by foreign exporters, while 5% of tariffs are evaded entirely. Harvard economist Alberto Cavallo noted a 'clear upward pressure' on prices as companies gradually pass expenses to shoppers.
Tracking over 359,000 products, researchers found imported goods prices rose 4% since March tariffs began, with domestic products increasing 2%. Essential imports like coffee saw sharper hikes due to limited U.S. production capacity. While sellers initially absorbed some costs, Yale Budget Lab experts confirm foreign producers now pass expenses to U.S. buyers through currency-adjusted pricing.
The tariffs have already elevated core PCE inflation by 0.2%, Goldman reports, projecting a 3.2% year-end rate if underlying trends persist. As global supply chains adapt, analysts warn consumers may face prolonged financial strain from trade policy decisions.
