The Digester

NY Fed: US Consumers Pay 90% of Trump’s Tariffs as Affordability Claims Clash with Rising Costs

Mar 1st 2026

A New York Fed report finds 2025 tariff hikes were mostly passed on to US firms and shoppers, and companies plus rising utility and healthcare costs are already pushing prices higher despite presidential claims that the affordability crisis is over.

  • The New York Fed found the average US import tariff rose from 2.6% to 13% in 2025 and around 90% of the burden was borne by US firms and consumers.
  • Corporate reports from Levi’s, Nike, BMW, McCormick and others say tariffs are driving planned price increases in 2026.
  • A tariff price tracker shows major retail gaps versus pre-tariff trends, with flooring up 66%, clothing up 18%, and home repair goods up 10%.
  • Germany’s Kiel Institute estimates European exporters absorbed only about 4% of the tariff costs while US importers and consumers absorbed 96%.
  • Rising utility and healthcare costs are compounding affordability problems, including roughly a 6.7% increase in electricity in 2025 and large projected spikes in some health premiums.
  • Tariffs function as a regressive consumption tax and hit smaller businesses harder because large firms can negotiate supplier discounts.

Sources

nationtimes.co.uk