US Tariffs in 2025: Americans Paid, Trade Shrunk

Using shipment-level data on over 25 million transactions, the authors find that the 2025 U.S. tariffs were almost entirely passed through to American import prices. Foreign exporters absorbed only about 4% of the burden, while U.S. customs revenue rose by around $200 billion in 2025. Event studies on Brazil and India, corroborated by Indian export data, show unchanged export prices and collapsing trade volumes.

Key Points

• Near-complete pass-through: about 96% of the 2025 U.S. tariff burden was borne by American importers and consumers, with foreign exporters absorbing only ~4%.
• Large-scale evidence: analysis uses shipment-level data covering 25+ million transactions worth nearly $4 trillion.
• Revenue effect: U.S. customs revenue increased by roughly $200 billion in 2025—paid predominantly by Americans.
• Event studies: Tariff hikes on Brazil (50%) and India (25–50%) did not trigger export price cuts; instead, trade volumes collapsed.
• Validation: Indian export customs data shows exporters kept prices steady and reduced quantities rather than “eating” the tariff.

Sentiment

The overall sentiment of the Hacker News discussion is largely in agreement with the article's findings, expressing a strong consensus that US consumers bear the brunt of tariffs, and criticizing the political rationales often given for their implementation.

In Agreement

• The finding that US consumers bear most of the tariff burden is not surprising, reflecting basic economic principles (Economics 101) where tariffs are essentially taxes on consumers.
• Many American voters believed misinformation from political figures and 'news' sources claiming foreign countries would pay, demonstrating a lack of critical thinking skills or economic literacy.
• The implementation of tariffs is seen as chaotic, poorly designed, and often driven by political whims rather than strategic economic policy, leading to unintended negative consequences for US manufacturing and consumers.
• The pass-through of costs to consumers is evident in rising prices, as shown by past examples like washing machine tariffs, which led to significant consumer costs and minimal job creation at a high expense.
• The increase in customs revenue acts as a domestic tax on Americans, benefiting the US Treasury but increasing the cost of living.
• Tariffs lead to trade contraction and a reduction in import volumes, but foreign exporters often do not lower prices because they can shift to other markets, further burdening US consumers.

Opposed

• Tariffs are intended as a mid-to-long term strategy to encourage onshoring of business for national security or economic independence, accepting short-term pain for long-term domestic strength.
• The primary goal is not immediate price reduction but to make imported goods more expensive, thereby incentivizing the purchase of American-made products and fostering domestic manufacturing.
• Some argue that the economic predictions of economists have been flawed in the past (e.g., inflation warnings), suggesting that the immediate impact of tariffs might be exaggerated or that other factors are at play.
• Tariffs can serve as a diplomatic tool, influencing trade partners and potentially diversifying sourcing, even if the immediate cost is borne by domestic consumers.
• The revenue generated by tariffs could be viewed as a way to increase government funds, especially for those who believe Americans are 'not taxed enough' or see it as a wealth transfer to the US Treasury.