• Foreign exporters absorb only 4% of tariff burden while Americans pay remaining 96%, German think tank finds
• Manufacturing sector has lost 60,000-72,000 jobs since Trump's April "Liberation Day" tariff announcement
• $200 billion surge in customs revenue represents consumption tax on American households and businesses

WASHINGTON, DC (TDR) — A comprehensive study analyzing millions of shipments reveals Americans are paying 96% of the costs imposed by President Donald Trump's tariffs, directly contradicting administration claims that foreign countries bear the financial burden of the import taxes.

The Kiel Institute for the World Economy, a German think tank, examined over 25 million shipment records covering approximately $4 trillion in goods imported to the United States between January 2024 and November 2025. Researchers found foreign exporters absorbed just 4% of tariff costs, with the remaining 96% passed through to U.S. buyers.

"Foreign exporters absorb only about 4% of the tariff burden—the remaining 96% is passed through to U.S. buyers," the study authors wrote.

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Tariffs Function as American Consumption Tax

The research published Monday concludes that tariffs operate as a consumption tax on Americans rather than extracting payments from foreign producers. The $200 billion increase in U.S. customs revenue in 2025 came almost entirely from American households and businesses, according to the analysis.

"The tariff functions not as a tax on foreign producers, but as a consumption tax on Americans," Kiel researchers Julian Hinz, Aaron Lohmann, Hendrik Mahlkow and Anna Vorwig wrote.

Julian Hinz, research director at the Kiel Institute and lead author, described the tariffs as an "own goal" that harms Americans more than foreigners.

"The claim that foreign countries pay these tariffs is a myth," Hinz stated. "The data show the opposite: Americans are footing the bill."

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The findings directly challenge Trump's repeated assertions that tariffs force trading partners to pay while generating revenue at no cost to American households. The administration has framed tariffs as a tool to extract concessions from foreign governments while boosting U.S. manufacturing.

Brazil and India Case Studies Reveal Pattern

Researchers specifically examined Brazil and India, both facing sharp tariff increases in August 2025. After a 50% duty took effect on Brazilian imports, exporters did not substantially reduce their dollar prices. India experienced a similar pattern after tariffs jumped from 25% to 50%.

"We compared Indian exports to the U.S. with shipments to Europe and Canada and identified a clear pattern," Hinz explained. "Both export value and volume to the U.S. dropped sharply, by up to 24 percent. But unit prices—the prices Indian exporters charged—remained unchanged."

After the 50% tariff on India took effect, U.S. imports from India dropped 18% to 24% compared to the European Union, Canada, and Australia. Rather than cutting prices to maintain market share, exporters redirected sales to other markets where they avoided high tariffs.

"There is no such thing as foreigners transferring wealth to the U.S. in the form of tariffs," Hinz told The Wall Street Journal.

Manufacturing Jobs Decline Every Month Since Liberation Day

Despite Trump's promise that tariffs would revive American manufacturing, the sector has hemorrhaged jobs since his April 2 "Liberation Day" announcement. Labor Department data shows manufacturers shed approximately 60,000 to 72,000 positions between April and the end of 2025.

"Jobs and factories will come roaring back into our country, and you see it happening already," Trump claimed in April.

The opposite occurred. Manufacturing employment declined every single month following the tariff announcement, with the sector losing about 8,000 jobs in December 2025 alone. The semiconductor industry, supposedly a high priority for the administration, shed more than 13,000 positions since April.

"2025 should have been a good year for manufacturing employment, and that didn't happen," economist Michael Hicks, director of the Center for Business and Economic Research at Ball State University, told The Washington Post. "I think you really have to indict tariffs for that."

A November survey by the Federal Reserve Bank of Richmond found 57% of mid-sized manufacturers reported no certainty about their input costs. Smaller companies proved even more likely to delay investments in facilities and equipment in response to tariff uncertainty.

"Every time I hear that manufacturing is booming, I scream at the TV," J.B. Brown, CEO of BCI Solutions Inc., a metal foundry in Bremen, Indiana, told Reuters. His workforce is half as large as it was two years ago.

Inflation Impact on Consumer Prices

Federal Reserve Chair Jerome Powell acknowledged in December that tariffs are causing "most" of the overshooting of the central bank's 2% inflation target. Inflation hit 2.7% last month, down slightly from 3% in January but still elevated.

The Kiel Institute study found that whether through higher prices on imported goods, higher prices on domestically produced goods using imported inputs, or reduced availability and variety of products, American households pay for the tariffs.

"Whether through higher prices on imported goods, higher prices on domestically produced goods that use imported inputs, or reduced availability and variety of products, American households pay for the tariffs," the study found.

Manufacturers and retailers face difficult choices between absorbing higher costs that squeeze margins or passing them along to consumers through price increases.

Supreme Court Decision Looms

The Supreme Court is expected to rule soon on whether Trump's use of emergency powers to levy tariffs under the International Emergency Economic Powers Act is legal. During November oral arguments, justices across the ideological spectrum expressed skepticism about the unprecedented use of emergency powers for what the Constitution explicitly reserves for Congress.

Companies like Costco are already filing for refunds, betting the Court will invalidate the tariffs and force the government to return an estimated $750 billion to $1 trillion collected under the emergency powers authority.

Treasury Secretary Scott Bessent assured in early December that even if the Court strikes down current tariffs, the administration can "recreate the exact tariff structure" using other legal authorities.

New Tariff Threats Continue

Trump continues expanding tariff use beyond economic policy into foreign policy disputes. Over the weekend, he announced 10% tariffs starting February 1 on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland after those countries sent troops for training exercises in Greenland.

"Starting on February 1st, 2026, all of the above mentioned Countries will be charged a 10% Tariff on any and all goods sent to the United States of America," Trump said on Truth Social, adding tariffs would increase to 25% on June 1 and remain until "a Deal is reached for the Complete and Total purchase of Greenland."

On Monday, Trump threatened a 200% tariff on French wine after French President Emmanuel Macron refused to join Trump's "Board of Peace" for Gaza, which requires a $1 billion buy-in for permanent membership.

Can Trump's tariff strategy achieve its stated goals when data shows Americans—not foreign countries—are bearing nearly all the economic costs?

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