US Consumers Bearing Brunt of Trump-Era Tariffs, Goldman Sachs Analysis Finds
American consumers are currently paying for more than half of the tariffs implemented during the Trump administration, with that figure reaching 55% by the end of the year, according to a recent economic analysis from Goldman Sachs.
Economists at Goldman Sachs, including Elsie Peng and David Mericle, determined that US consumers will absorb 55% of the tariff costs, while US companies will shoulder 22% and foreign exporters will absorb the remaining 18% through price reductions. The analysis indicates that US businesses are likely absorbing costs gradually by incrementally raising prices. This shift in cost burden has implications for household spending and overall economic growth.
The report estimates that the tariffs will likely push the inflation rate to 3% by December, exceeding the Federal Reserve’s 2% target. So far this year, core personal consumption expenditure prices – a key metric for the Fed – have risen by 0.44% due to the tariffs. The White House countered the findings, stating, “The President and Administration’s position has always been clear: while Americans may face a transition period…the cost of tariffs will ultimately be borne by foreign exporters,” according to spokesman Kush Desai. For more information on the Federal Reserve’s monetary policy, visit the Federal Reserve Board website.
The analysis is contingent on the evolving nature of tariffs as trade negotiations continue, and does not include recent threats of increased duties on China. President Trump previously criticized Goldman Sachs’ assessments of his tariff policies, dismissing their predictions as inaccurate. The Bureau of Labor Statistics has been impacted by the recent government shutdown, delaying the release of key economic data, including the September inflation report, now scheduled for October 24th. You can find more information about the Bureau of Labor Statistics here.
Officials indicated they will continue to monitor the economic impact of the tariffs as trade talks progress.
