U.S. Consumers Shoulder Majority of New Tariffs by Mid-June: Yale Study

US consumers bore the majority of tariffs by mid-June, with between 61% and 80% of the 2025 tariffs being passed through to consumer prices for core goods in June alone, according to a Yale University research report. Economists from The Budget Lab at Yale University observed this high pass-through rate.

Title: US Consumers Bear the Brunt of Tariffs

US consumers are increasingly feeling the pinch of tariffs, with a significant portion of the costs being passed on to them. According to a recent report from Yale University's The Budget Lab, between 61% and 80% of the 2025 tariffs were passed through to consumer prices for core goods by mid-June [1]. This high pass-through rate indicates that the economic burden of tariffs is being felt more by consumers than by businesses.

Caterpillar Inc., one of the world's leading manufacturers of machinery for mining and construction, has also warned investors about the impact of tariffs on its business. The company now expects tariffs to cost it as much as $1.8 billion this year, a significant increase from its previous estimates [2]. This highlights the broader economic implications of tariffs, which are not limited to specific industries but are instead being felt across the entire economy.

The economic pain caused by tariffs is also evident in the broader economy. The Associated Press reported that Trump's broad tariffs went into effect just as economic pain was surfacing, with the U.S. economy facing increased inflation and decreased consumer confidence [3]. These factors, combined with the high pass-through rates of tariffs to consumers, suggest that the economic impact of tariffs is more severe than initially anticipated.

Moreover, the economic impact of tariffs is not limited to the immediate costs to consumers. The U.S. Chamber of Commerce has highlighted the long-term effects of tariffs on small businesses, with many businesses warning of the potential for long-term fallout [4]. This indicates that the economic costs of tariffs are not just immediate but are also likely to have lasting effects on the economy.

In conclusion, the high pass-through rates of tariffs to consumers, combined with the broader economic impact of tariffs, suggest that the economic burden of tariffs is significant. As tariffs continue to be a contentious issue in U.S. trade policy, it is essential for policymakers to consider the economic impacts on consumers and businesses when making decisions about trade policy.

References
[1] The Budget Lab at Yale, "State of U.S. Tariffs: August 7, 2025," August 7, 2025, available at https://budgetlab.yale.edu/research/state-us-tariffs-august-7-2025.
[2] Bloomberg Law, "Caterpillar Warns Tariff Impact Bigger Than Previously Seen," August 25, 2025, available at https://news.bloomberglaw.com/international-trade/caterpillar-warns-tariff-impact-bigger-than-previously-seen-1.
[3] The Associated Press, "Trump’s Broad Tariffs Go into Effect, Just as Economic Pain is Surfacing," NPR, August 7, 2025, available at https://www.npr.org/2025/08/07/nx-s1-5495218/trump-tariffs-trade-economy.
[4] U.S. Chamber of Commerce, "'A Matter of Survival': Small Businesses Speak Out on Tariffs," March 3, 2025, available at https://www.uschamber.com/small-business/american-workers-businesses-consumers-trade-tariffs.