US Importers Bear Brunt of Tariff Costs Despite Liberation Day

US importers are shouldering the costs of tariffs introduced by the Trump administration, with import prices increasing by 2.2% since the tariffs were implemented. This is based on a research note from George Saravelos, head of FX research at Deutsche Bank.

The Trump administration's tariff policies have been a significant factor in shaping the global trade landscape. According to a recent research note from George Saravelos, head of FX research at Deutsche Bank, US importers are shouldering the costs of these tariffs, with import prices increasing by 2.2% since their implementation [3].

The administration has implemented tariffs on a wide range of goods, with the most recent announcement targeting 14 trading partners, including a proposed 25% to 40% import tax increase set to take effect on August 1, 2025 [1]. These tariffs are part of a broader strategy aimed at protecting domestic industries and addressing trade imbalances.

Despite the administration's claims that foreign exporters would bear the brunt of the tariffs, data suggests otherwise. According to Deutsche Bank, American importers are primarily absorbing the costs. The research note states that if foreign exporters were absorbing the tariffs, there would be a sharp reduction in the price of imported goods. However, the data shows only mild price reductions, mainly from Canada and the UK, with China's average tariff rates rising by more than 30% but resulting in only a 1% drop in dollar import prices [4].

The increasing import prices have significant implications for businesses and consumers. Companies like General Motors have reported that tariffs are denting profits, with the automaker absorbing more than $1 billion in costs [3]. This suggests that while some firms are absorbing the costs, others are passing them on to consumers, potentially leading to higher prices for goods like toys and appliances.

The administration's approach to tariffs has been a consistent feature of its economic strategy, with similar measures applied to various sectors in previous years. The current action appears to be a continuation of that strategy, reinforcing the administration's stance on trade protectionism [1].

In conclusion, the data indicates that US importers are bearing the brunt of the Trump administration's tariffs, with import prices increasing by 2.2% since their implementation. This has significant implications for businesses and consumers, highlighting the need for careful monitoring and strategic adjustments in response to these policy changes.

References:
[1] https://www.ainvest.com/news/trump-administration-announces-additional-tariff-letters-14-trading-partners-2507/
[2] https://finance.yahoo.com/news/live/trump-tariffs-live-updates-trump-says-us-has-reached-trade-deal-with-the-philippines-as-eu-india-talks-lag-200619084.html
[3] https://www.bloomberg.com/news/articles/2025-07-22/us-companies-and-consumers-are-paying-for-trump-s-tariffs
[4] https://finance.yahoo.com/news/deutsche-bank-americans-not-foreigners-111807065.html