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center for economic and policy research
Major Study Shows US Consumers, Businesses Pay for Vast Majority of Trump's Tariffs
"Every dollar of tariff revenue represents a dollar extracted from American businesses and households."
Jan 19, 2026
President Donald Trump has long insisted, in the face of decades of research by economists, that foreign producers are the only ones who are paying for his tariffs on imported goods.
However, a major new study released Monday by the Kiel Institute for the World Economy, an economic think tank based in Germany, shows that US businesses and consumers are shouldering the burden for the vast majority of Trump's tariffs.
After examining more than 25 million shipment records of goods imported to the US last year, the institute found that foreign exporters only absorbed 4% of the $200 billion in tariff payments, with the remaining 96% being passed on to US importers and consumers.
"This finding has profound implications," the study explains. "If foreign exporters do not reduce their prices in response to tariffs, then the entire burden of the tariff falls on US buyers. The tariff functions not as a tax on foreign producers, but as a consumption tax on Americans. Every dollar of tariff revenue represents a dollar extracted from American businesses and households."
The study identifies several factors to explain why exporters did not slash their prices to remain competitive in the lucrative US market, including exporters shifting their sales to other markets where they will not face such high tariffs; firms not being able to shoulder the high price cut that would be needed to overcome the tariff rates set by the president; and companies not wanting to give Trump an incentive for further tariffs by rewarding US consumers with lower prices.
Julian Hinz, research director at the Kiel Institute and an author of the study, described the Trump tariffs as an "own goal" that has harmed Americans far more than it has harmed foreigners.
"The claim that foreign countries pay these tariffs is a myth," explained Hinz. "The data show the opposite: Americans are footing the bill."
The Kiel Institute study came out two days after Trump vowed to slap even more tariffs on European countries opposed to his efforts to take over Greenland.
In an analysis published Monday, economist Dean Baker of the Center for Economic and Policy Research (CEPR) said that the latest Trump tariffs on Europe amounted to a "$75 billion tax increase" in an attempt to fulfill the president's "demented dreams" of taking over the self-governing Danish territory.
"Well over 90% of the cost of a Trump tariff is borne by consumers or importers in the United States, not by the exporting countries," Baker contended. "When Trump starts yelling 'tariff, tariff, tariff,' he is yelling 'tax, tax, tax,' and we’re the ones paying it. And $75 billion is not trivial. It’s 1% of the budget, more than twice the cost of the enhanced premiums for Obamacare policies that Trump says we can’t afford."
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Weak US Jobs Report Shows 'Bleak Economic Reality' for Workers Under Trump
There has been "almost no hiring since April," observed one economist.
Jan 09, 2026
The US labor market appears to be running on fumes under President Donald Trump, as the latest jobs report revealed that the American economy added just 50,000 jobs in December, below economists' consensus estimate of 55,000 jobs.
The report, released on Friday by the Bureau of Labor Statistics (BLS), also found that the US economy as a whole created just 584,000 jobs in 2025, which is less than a third of the 2 million jobs created in 2024 during the last year of former President Joe Biden's term.
The 2025 figure also marked the lowest number of annual jobs created since 2020, when the economy was shut down due to the Covid-19 pandemic.
Fox Business anchor Cheryl Casone couldn't put a happy spin on the jobs report after its release, as she noted that the gains of just 37,000 private-sector jobs on the month were "much weaker than expected."
"Private sector payrolls coming in much weaker than expected" -- Maria Bartiromo and company cope with an underwhelming December jobs report (wait for Stephen Moore's bonkers commentary at the end) pic.twitter.com/C5D8qu5h8f
— Aaron Rupar (@atrupar) January 9, 2026
Digging further into the report, Bloomberg economic analyst Joe Weisenthal observed on X that manufacturing employment has been hit particularly hard in recent months, despite Trump's vow that his tariffs would lead to a manufacturing revival in the US.
"It's not just that total manufacturing employment is shrinking," he explained. "The number of manufacturing sub-sectors that are adding jobs is rapidly shrinking. Of the 72 different types of manufacturing tracked by the BLS, just 38.2% are still adding jobs. A year ago it was 47.2%."
Heather Long, chief economist at Navy Federal Credit Union, noted that the weakness in the labor market extends beyond the manufacturing sector, as there has been "almost no hiring outside of healthcare and hospitality" since the start of Trump's second term.
Richardson also observed that "there was almost no hiring since April" of last year, when Trump announced his "Liberation Day" tariffs that sent shockwaves through the global economy.
Economist Dean Baker, co-founder of the Center for Economic and Policy Research, zeroed in on downward revisions in prior jobs reports, reinforcing that the current labor market is anemic.
"With the revisions, the average for the last three months was a fall of 22,000 [jobs]," Baker explained. "The healthcare and social assistance sector added an average of 49,000 jobs over this period, which means that outside of healthcare the economy lost an average of 71,000 jobs in the last three months."
Alex Jacquez, chief economist at Groundwork Collaborative, said the jobs report reflected a "lifeless economy," and he pinned the blame on Trump and his trade policies as a top reason.
"Working families face sluggish wage growth, fewer job opportunities, and never-ending price hikes on groceries, household essentials, and utilities," said Jacquez. "Despite the president's endless attempts to deflect and distract from the bleak economic reality, workers and job seekers know their budgets feel tighter than ever thanks to Trump’s disastrous economic mismanagement."
Economist Elise Gould of the Economic Policy Institute took a look at the jobs numbers and concluded the US labor market now is far weaker than the one Biden left Trump nearly one year ago.
"The slowdown in job growth this year is stark compared to 2024," Gould wrote on Bluesky. "The average monthly gain was only 49,000 in 2025 compared to 168,000 in 2024. Over the last three months, average job growth was actually negative, meaning there are fewer jobs now than in September."
Correction: An earlier version of this story misidentified the Navy Federal Credit Union's chief economist. That error has been corrected.
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‘Yikes’: New Jobs Data Further Undermines Trump Fiction of Thriving Economy
"The booming job market exists only in Donald Trump's demented head," said economist Dean Baker.
Dec 03, 2025
Economists on Wednesday expressed significant concerns after new data from global payroll processing firm ADP estimated that the US economy lost 32,000 jobs last month.
As reported by CNBC, small businesses bore the brunt of the job losses, as firms with fewer than 50 employees shed a total of 120,000 jobs, more than offsetting the 90,000 in job gains reported by firms with 50 or more employees.
The loss of 32,000 jobs in November marked a major miss for economists' consensus estimate of 40,000 jobs added on the month, and CNBC noted that the total number of jobs lost according to ADP data "was the biggest drop since March 2023."
Heather Long, chief economist at Navy Federal Credit Union, noted in a post on X that the job losses recorded by ADP were widespread across the US economy.
"Yikes," she wrote in reaction to the report. "Most industries were doing layoffs. The only ones still are hiring are hospitality and healthcare."
Long also said the disparity between small and large businesses in terms of job growth was more evidence that the US is experiencing a "K-shaped" economy in which those at the top of the economic ladder thrive, even as everyone else struggles.
"Larger companies are still hiring," she explained. "Smaller firms (under 50 workers) are doing the layoffs. It's been a very tough year for small biz due to tariffs and more selective spending from lower and middle-class consumers."
Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research, observed that ADP hasn't reported such a big drop in small-business employment since October 2020, when the US economy was suffering through the peak of the Covid-19 pandemic.
Alex Jacquez, chief of policy and advocacy at Groundwork Collaborative, cautioned against reading too much into ADP data, although he added that "in the absence of up to date government payrolls, all other signs point to a further deteriorating labor market."
Charlie Bilello, chief market strategist at financial planner Creative Planning, argued that the ADP jobs numbers were part of a negative three-month trend in which the US economy lost an estimated 4,000 jobs per month, which he said was "the first three-month decline since the 2020 recession."
Bilello added that "a year ago, we were adding over 200,000 jobs per month."
Diane Swonk, chief economist at accounting firm KPMG, argued that the ADP report showed job losses in the US economy were "broad based" and "were accompanied by a cooling of wage gains" for workers who still have jobs or are switching from one job to another.
"Those with a job are clinging on, while those without are left wanting," she explained.
Dean Baker, senior economist at the Center for Economic and Policy Research, argued that the ADP report blows up President Donald Trump's spin about the health of the US economy.
"The booming job market exists only in Donald Trump's demented head," he wrote.
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