Tariffs: The 'Portion' Likely to Hit U.S. Consumers

As the U.S. administration considers imposing tariffs on imports, consumers are wondering how much of the financial burden they will bear. Economists and analysts have been weighing in on the topic, with many agreeing that a significant portion of the tariff costs will be passed on to U.S. consumers. In this article, we'll explore the extent to which tariffs are likely to impact consumers and discuss strategies they can employ to mitigate the effects.



The 'Portion' of Tariffs Likely to Hit U.S. Consumers

According to a survey conducted by Olivier Coibion, Yuriy Gorodnichenko, and Michael Weber, about 40% of respondents, including close to a third of Republicans, said they were likely to stockpile goods before tariffs hit. This suggests that consumers are already preparing for the potential price increases that tariffs may bring. However, the extent to which consumers will be able to mitigate the impact of tariffs remains uncertain.

Economists estimate that about two-thirds of the tariff costs will be passed on to consumers, with the remaining one-third absorbed by foreign producers (EconoFact, 2025). This is because tariffs increase the cost of imported goods, and businesses typically pass these additional costs on to consumers in the form of higher prices.

The sectors most likely to be affected by the tariffs are those that heavily rely on imported goods or have highly integrated international supply chains. For example, the motor vehicle sector is expected to be particularly impacted, as parts and components cross borders multiple times during the production process. This can amplify the increase in production costs and lead to higher prices for consumers on both sides of the border (Bank of Canada, 2019).

In the United States, the U.S. International Trade Commission (USITC) found that in 2021, the tariffs increased prices between 1.7% and 7.1% in the ten most affected sectors. These sectors include apparel, car parts, furniture, and computer equipment (USITC, 2021). The Yale Budget Lab estimates that consumer prices would rise by 1.4% to 5.1% with a cost per household of $1,900 to $7,600 under a 10% tariff on all U.S. imports and a 60% tariff on Chinese goods (The Budget Lab, 2024).



Strategies to Mitigate the Impact of Tariffs

To mitigate the impact of tariffs on their purchasing power, U.S. consumers can employ several strategies. However, the effectiveness of these strategies may vary. Here are some strategies and their potential effectiveness, supported by data and examples from the provided materials:

1. Stockpiling goods: Consumers can stockpile goods before tariffs hit to avoid higher prices. According to the survey conducted by Coibion et al. (2025), about 40% of respondents were likely to stockpile goods before tariffs hit. This strategy can be effective in the short term, but it may not be sustainable in the long run due to storage limitations and the risk of goods expiring or becoming obsolete.
2. Squirreling away money: Consumers can set aside money in preparation for possible price hikes. In the same survey, more than a third of respondents said they were likely to try to squirrel away money due to higher price uncertainty (Coibion et al., 2025). This strategy can help consumers absorb the initial shock of price increases, but it may not be feasible for all consumers, especially those with limited financial resources.
3. Substituting goods: Consumers can substitute imported goods with domestically produced alternatives or goods from other countries not subject to tariffs. However, this strategy may not be effective if close substitutes are not readily available or if the quality of the substitute is significantly lower.
4. Reducing consumption: Consumers can reduce their consumption of goods subject to tariffs. This strategy can help consumers save money, but it may also lead to a decrease in overall consumer spending, which can have broader economic implications.
5. Lobbying for exemptions: Consumers can lobby their representatives to push for exemptions on specific goods or industries. However, this strategy may not be effective for all consumers or industries.
6. Waiting for exemptions or reduced tariffs: Consumers can wait for exemptions or reduced tariffs to be implemented. However, this strategy may not be effective if exemptions or reduced tariffs are not implemented or if the waiting period is too long.

In conclusion, while these strategies can help U.S. consumers mitigate the impact of tariffs on their purchasing power, their effectiveness may vary depending on the specific circumstances and individual consumer preferences. It is essential for consumers to stay informed about the latest developments in tariff policies and adapt their strategies accordingly.

Sources:
Coibion, O., Gorodnichenko, Y., & Weber, M. (2025). The Upcoming Trump Tariffs: What Americans Expect and How They Are Responding. Working paper.
EconoFact. (2025). What Populists Don’t Understand About Tariffs (but economists do). Retrieved from
The Budget Lab. (2024). Fiscal, Macroeconomic, and Price Estimates of Tariffs Under Both Non-Retaliation and Retaliation Scenarios. Retrieved from
U.S. International Trade Commission. (2021). Economic Impact of Section 232 and 301 Tariffs on U.S. Industries. Retrieved from