Who pays tariffs

 

Contrary to some claims, tariffs are primarily paid by importers - American companies that bring foreign goods into the country - not by the exporting nations12. Here's a breakdown of who bears the cost of tariffs:

1. Importers: U.S. companies importing goods are responsible for paying tariffs upfront2. These payments are made to Customs and Border Protection at 328 designated entry points across the United States2.

2. Consumers: Ultimately, a significant portion of tariff costs is passed on to consumers through higher prices for goods12. Companies with tight profit margins, such as those in food services or retail, are more likely to increase prices to offset tariff costs1.

3. Domestic Companies: Some businesses may absorb part of the tariff costs to remain competitive, potentially affecting their profitability1.

4. U.S. Government: The federal government collects tariff revenue. In recent years, tariff collections have increased substantially, with the Trump administration collecting $89.1 billion and the Biden administration collecting $144.3 billion1.

5. Exporting Countries: While they don't directly pay the tariffs, exporting nations can be indirectly affected through decreased demand for their products, potentially leading to economic challenges and job losses in those countries2.

Recent studies have found that the tariffs implemented during the Trump administration were passed almost entirely to U.S. firms or final consumers, contrary to historical patterns where foreign firms absorbed some of the burden by lowering their prices4.

It's important to note that while tariffs are often portrayed as taxes on foreign countries, the reality is that American businesses and consumers bear the majority of the financial burden through increased costs and potentially higher prices57.

Citations:

1. https://www.bankrate.com/taxes/trump-tariffs-explained/
2. https://www.cnn.com/2025/03/05/business/what-is-tariff-who-pays-imports/index.html
3. https://www.instituteforgovernment.org.uk/explainer/trade-tariffs
4. https://taxfoundation.org/blog/who-pays-tariffs/
5. https://www.pbs.org/newshour/economy/5-things-to-know-about-tariffs-and-how-they-work
6. https://www.bbc.com/news/articles/cn93e12rypgo
7. https://www.usnews.com/news/national-news/articles/what-is-a-tariff-and-who-pays-it-spoiler-alert-you-will
8. https://www.npr.org/2025/03/07/nx-s1-5318785/tariff-dodging-companies-exemptions-engineering