New research from the New York Fed finds that nearly 90% of the costs of Donald Trump’s 2025 tariffs were ultimately paid by U.S. firms and households, based on import data tracked through November 2025. Released in February 2026 as a Liberty Street Economics post, the analysis directly challenges claims that foreign exporters absorbed most of the hit and raises fresh questions about how trade policy is affecting family budgets. With another election year fight over tariffs already underway, the findings sharpen the economic stakes for shoppers facing higher prices on everyday goods and for businesses squeezed by rising input costs.
The Rise of 2025 Trump Tariffs
The tariff story that culminated in the New York Fed’s finding began with a sharp reset of the U.S. import tax schedule at the start of 2025. According to the official Primary HTS dataset, the average tariff rate on covered goods climbed from 2.6% to roughly 13%, with the new schedule mapping every product to a specific Harmonized Tariff Schedule line. That dataset, labeled as Primary and tagged as Supports replication, gives researchers a public blueprint for which goods were swept into the higher rate and how those lines evolved through subsequent revisions.
Behind the scenes, those changes were implemented through a series of formal notices and technical updates. A release from the Primary USITC on a 2025 HTS revision points to a specific Federal Register citation and provides machine readable HTS files in CSV, XLSX and JSON formats, making it possible to trace how individual tariff lines moved from legacy rates to the new 13% level. Steel imports, for example, are identified through dedicated HTS codes whose duty rates were recalculated in those files, giving a concrete example of how the rule changes filtered down to a single sector.
NY Fed’s Methodology Breakdown
The New York Fed’s central claim about who paid for the tariffs rests on a detailed analysis of U.S. import data. Economists there relied on the Census Bureau’s merchandise trade statistics, which track quantities, values and duties for every HTS-classified shipment entering the country. The Census import statistics program, described in a Primary Census overview, records commodity level information including HTS classification, quantities, customs value, duties collected, unit prices and country of origin, giving the Fed a granular view of how tariffs changed the prices importers actually paid through November 2025.
To estimate incidence, the Fed economists compared the observed path of import prices and duties with a trend counterfactual that extrapolated pre tariff behavior. The Liberty Street Economics post is cataloged in an Authoritative Federal Reserve System record that lists it under the New York Fed Liberty Street Economics series and assigns the persistent identifier DOI 10.59576, allowing other researchers to verify and replicate the work. By tying each product’s tariff rate from the HTS dataset to its realized import price and duty payments in the Census data, the authors could calculate how much of the tariff was passed through to U.S. importers versus absorbed by foreign exporters.
Key Findings on Tariff Incidence
The headline result from the Primary New York Fed analysis is stark: nearly 90% of the 2025 tariff burden fell on U.S. firms and consumers. Using import data through Nov, the economists found that from Jan through Aug the pass through rate to U.S. importers was 94%, meaning foreign suppliers trimmed prices only marginally in response to the new duties. That share dipped slightly to 92% in Sep and Oct and then to 86% in Nov, but at no point did the data suggest that overseas producers were bearing anything close to half of the cost.
Several outlets that reviewed the findings stressed the same basic conclusion. One Fortune report summarized the result as confirmation that Americans were largely footing the Trump tariff bill, while a New York Post account framed it as evidence that U.S. consumers and businesses bore about 90% of the costs. Another AOL write up described Americans as having paid nearly 90% of the tariffs, closely matching the Fed’s estimated incidence. In the Liberty Street Economics post itself, the Fed economists explained that the burden was “overwhelmingly” on U.S. importers rather than foreign exporters, given how little foreign prices moved relative to the jump in statutory tariff rates.
Why This Matters for US Shoppers and Firms
The macro level finding that almost all of the tariff cost landed on U.S. importers quickly translates into higher prices for households and businesses. A Primary analytical note from the Yale Budget Lab, which focuses on near term consumer price effects, estimates that between 61% and 80% of the 2025 tariffs on core goods and durables will pass through to retail prices through June 2025 under different modeling approaches. That range, explicitly labeled as 61% and 80%, is based on similar identification assumptions about trend counterfactuals, dollar exchange rate movements and inventory drawdowns, and it points to a significant hit for shoppers buying everything from refrigerators to smartphones.
Media coverage has already connected those abstract percentages to real world purchases. A CNN segment on the tariffs highlighted higher sticker prices for durable goods like washing machines and mid range laptops, as importers facing 13% duties on components or finished products passed those costs along. For small manufacturers that rely on imported steel identified in HTS codes flagged in the 2025 schedule, the combination of a jump from 2.6% to 13% tariffs and limited ability to switch suppliers has meant thinner margins or higher prices for customers, a pattern that lines up with the New York Fed’s conclusion that U.S. firms are absorbing most of the initial shock.
Broader Economic and Policy Context
The New York Fed’s findings also feed into a broader political argument over whether tariffs are an effective tool for shrinking trade deficits or reshoring production. According to a BBC analysis, supporters of the 2025 tariff package have framed the higher duties as a way to pressure trading partners and reduce the U.S. deficit, while critics point to the Fed’s 90% incidence estimate as evidence that the policy functions more like a tax on domestic consumers. The same BBC reporting notes that the administration has argued that any short term price increases are justified by longer term gains in bargaining power, a claim the Fed analysis neither endorses nor rejects.
Financial press coverage has focused more on the scale of the money involved. The Financial Times cited Census data showing a large rise in total duties collected after the 2025 HTS changes, reflecting the move from 2.6% to 13% average rates on affected lines. Combined with the New York Fed’s finding that 94% of the Jan through Aug burden and 92% in Sep and Oct fell on U.S. importers, that revenue figure suggests a sizeable transfer from private sector balance sheets to the federal government. For policymakers weighing whether to extend or expand the tariffs, the question is increasingly whether that revenue and any perceived leverage abroad are worth the domestic economic drag implied by the Fed’s numbers.
What Remains Uncertain
Despite the precision of the New York Fed’s estimates, the economists behind the Liberty Street Economics post are explicit about what their Nov 2025 data cannot show. The analysis captures incidence through Nov, with month specific figures of 94% from Jan to Aug, 92% in Sep and Oct and 86% in Nov, but it does not fully incorporate longer term adjustments such as firms reconfiguring supply chains or renegotiating contracts. Inventory effects are another blind spot: importers that stocked up before the 13% rate took effect might temporarily shield customers from higher prices, which could help explain the slight easing in the incidence rate to 86% by Nov.
The Yale Budget Lab’s Primary note also cautions that its 61% to 80% pass through range for consumer prices is a short run projection that depends on assumptions about how quickly wholesalers and retailers adjust margins. Future updates from agencies such as the USITC, which maintains the evolving HTS schedule, and from the Census import statistics program will be crucial for tracking whether foreign exporters eventually absorb more of the tariff burden or whether U.S. shoppers continue to pay nearly 90% of the bill. For now, the balance of evidence from the New York Fed, the Yale Budget Lab and outside coverage from outlets like Fortune and AOL points in the same direction: the 2025 tariffs have functioned primarily as a tax on Americans rather than a penalty on foreign producers.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
