Customers Have Been Spared Most Of The Tariff Costs So Far

A recent Goldman Sachs analysis shows that, so far, U.S. consumers have only faced a small share of the Trump-era tariffs, but that is expected to shift soon. Led by economist Elsie Peng, the study found that up to June, U.S. businesses bore 64% of the tariff costs, consumers absorbed 22%, and foreign exporters covered 14% by lowering their prices. However, this balance is likely to change as broader tariffs take effect. By October, Goldman forecasts that U.S. consumers will bear nearly two-thirds of the tariff burden, with foreign firms handling 25% and U.S. companies just 8%.

This shift is politically sensitive, as the Trump administration has argued that consumer prices haven’t significantly risen post-tariffs. However, Goldman notes that prices for household appliances and tech equipment are already climbing. Domestic producers, protected from imports, have also raised prices. Goldman expects core PCE inflation to reach 3.2% year-over-year in December, above the Federal Reserve’s 2% target.