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 Hacker News community overwhelmingly agrees with the article's findings. The dominant view is that tariffs being paid by American consumers is basic, well-established economics. Pro-tariff voices exist but represent a small minority, and their arguments tend to focus on strategic benefits rather than disputing the economic analysis. The overall tone is a mix of exasperation and genuine concern about political tribalism overriding economic literacy.

In Agreement

• This is economics 101 — near-universal agreement that consumers paying tariffs is basic economic theory that did not need a study to confirm
• Tariffs function as a regressive consumption tax on Americans, ironically imposed by an administration that claims to oppose tax increases
• Foreign exporters maintained prices rather than absorbing tariff costs, exactly as economic theory predicts
• Trade volumes collapsed rather than prices adjusting, showing tariffs reduce trade rather than shift its terms
• Companies will not invest in domestic manufacturing capacity when tariff policy can be reversed by the next administration, making the reshoring argument hollow

Opposed

• Broader economic indicators remain positive (GDP growth, stock market highs, low energy prices, falling trade deficit) suggesting tariffs have not caused the predicted economic catastrophe
• Tariffs are working as intended by making imports more expensive to incentivize domestic production and on-shoring
• The study is from a German think tank with potential bias, as Germany's exports to the US have been directly impacted by tariffs
• The 96% pass-through figure may be overstated since the methodology does not account for consumer substitution toward domestic goods
• Trade deficits represent a genuine loss of domestic manufacturing capability and jobs, so reducing them has strategic value even at consumer cost