Ask Onix
Tariffs jump to 13% in 2025, study finds
New York Fed research released Thursday shows the average US tariff rate on imported goods climbed from 2.6% at the start of 2025 to 13% by year's end, following President Donald Trump's revised trade agreements.
Who pays the price?
The New York Fed determined that American companies absorbed 90% of the higher tariffs imposed on goods from Mexico, China, Canada, and the European Union. Economists concluded that US firms and consumers shouldered most of the financial burden.
"US firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025."
Exporters hold firm on prices
Despite rising tariffs, foreign suppliers did not reduce prices to maintain demand. Instead, they maintained their pricing, forcing US importers to raise retail costs for shoppers. This pattern mirrors the 2018 tariffs during Trump's first term, which also led to higher consumer prices with minimal broader economic effects, according to the New York Fed.
Trade volumes shrink, prices stay high
Independent research supports the findings. The Kiel Institute for the World Economy in Germany analyzed 25 million transactions and found "near-complete pass-through of tariffs to US import prices." Rather than lowering prices, exporters like Brazil and India cut shipments to the US. The National Bureau of Economic Research similarly reported that tariff costs were passed on almost entirely to US buyers.
Household impact: $1,300 annual cost projected for 2026
The Tax Foundation, a Washington-based think tank, classified the tariffs as a consumer tax. Its analysis showed the 2025 increases cost the average US household $1,000 (£734.30). For 2026, the burden is projected to rise to $1,300 per household. The foundation noted the "effective" tariff rate-adjusted for reduced purchasing-now stands at 9.9%, the highest since 1946.
Tax cuts offset by tariff costs
The Tax Foundation warned that the economic benefits of Trump's "Big Beautiful Bill" tax cuts would be fully negated by the rising tariff expenses.
