US citizens pay 96% of Trump's tariffs: the bill amounts to €163 billion.

BarcelonaAccording to a study, 96% of the cost of tariffs on foreign exports to the United States is paid by American businesses and consumers. think tank German Kiel Institute. This means that 192 billion of the additional 200 billion dollars (163.6 billion and 170.4 billion euros, respectively) that were to be collected in 2025 in trade tariffs at US customs have ended up being a transfer of money from American citizens to their federal government.

The study, titled America's own goal: who pays the tariffs? [America's Own Goal: Who Pays the Tariffs?] and written by four economists from the Kiel Institute, analyzes data from 25 million trade transactions with a total value exceeding $4 trillion (€3.4 trillion). The document also examines the specific cases of India and Brazil, two countries that "experienced a sharp and sudden increase in tariffs in August 2025."

According to the article, "US importers and consumers bear almost the entire cost" of the tariffs imposed by Trump, while "foreign exporters absorb only 4% of the tariff burden." Specifically, it finds a reduction of $0.04 to the original price of a product for every additional dollar added in tariffs. In other words, "if the US imposes a 25% tariff on a product, exporters will reduce the pre-tariff price by less than 1%," while "the tariff-inclusive price paid by US importers will rise by approximately 24%, almost the entire tariff," according to the study. This demonstrates that Trump's claim that tariffs are a tax paid by foreign companies is "empirically false," according to the study.

This price increase absorbed by the American importer has two possible effects: either it is added to the final sale price, making the product more expensive and thus passed on to the end consumer, or the importer absorbs it as a drop in profits. Both scenarios, which can be partially compatible, have a negative impact on economic activity in the US: the higher price of products means less disposable income for spending or investment, while if the importer absorbs the additional cost, they distribute fewer dividends to shareholders or have fewer funds available for investment. If the price increase caused by the tariff is added to the final sale price, it also leads to a rise in the cost of living for US families, as products become more expensive. The only positive effect is for the federal government, which gains additional revenue and can increase public spending.

Already in his first term as US president, between 2017 and 2020, but even more so in his second term, which began a year ago, Trump has used tariffs as a supposed tool to increase industrial production within the US and reduce trade dependence on imports. Furthermore, the US president also uses them as a diplomatic threat in geopolitical tensions with other states.

The other variable analyzed in the Kiel Institute study is what happens to the volume of sales of products from other countries to the US once new tariffs are imposed. The study's conclusion, in this case, is also clear: the volume of products crossing the border falls drastically. "The primary effect of tariffs is to reduce imports, not to force foreign producers to accept lower prices," the report adds.

Furthermore, a reduction in imports leads to product shortages, resulting in higher prices or supply problems—two situations that negatively impact US economic growth.

Why don't foreign exporters absorb the tariffs?

How can it be explained that one of the two parties involved in trade ends up bearing the brunt of the costs so significantly? The report presents three compatible explanations. The first is that "the United States is a large market, but not the only one." This means that foreign exporters can stand up to their American customers because they have alternatives to continue selling their products at the same price in other countries. This is evident in the case of India, according to the report. Another explanation is that the trade tariffs imposed by Trump are extremely high compared to what was typical before his return to the White House. For example, to offset a 50% tariff like those imposed in Brazil or India, an exporter from these two countries is forced to cut their original price by a third, which likely makes the transaction financially unviable. "Given the choice between maintaining profit margins with reduced sales or cutting margins to maintain volume, most exporters prefer the former," the document states. The third reason is that some exporters outside the US expect the tariffs to be temporary and eventually reduced or eliminated through negotiations between governments, which has happened in some cases, so they prefer not to adjust prices.