By Steve Rhode, founder of GetOutOfDebt.org — helping people escape debt since 1994.
I’m not going to tell you what to believe about tariffs. I’m going to show you where to look, and you can decide for yourself.
I still run into people — good, smart people — who believe that foreign countries paid the tariffs. They believe it because they heard it repeated so many times that it became background truth. Not because they investigated it. Not because they read a study. Because repetition is powerful, and most of us don’t have time to chase down Federal Reserve working papers on a Tuesday afternoon.
So I did it for you.
What follows is every major study I could find on who actually pays when the U.S. government puts tariffs on imported goods. These aren’t opinion pieces. They’re from the Federal Reserve, the Congressional Budget Office, Harvard, Columbia, the University of Chicago, Yale, and the American Economic Review — one of the most respected peer-reviewed economics journals in the world.
Every link in this email takes you to the actual study. Not a news article about the study. The study itself. Read the abstracts. Read the methodology. Reach your own conclusion.
I already reached mine.
How a tariff actually works
Before we get to who pays, let’s establish something simple that isn’t controversial.
When the U.S. government imposes a tariff on Chinese-made goods, a U.S. company — the importer — files paperwork with U.S. Customs and Border Protection (CBP). The importer writes a check to CBP. Not the Chinese company. Not the Chinese government. The American importer.
This isn’t disputed by anyone. It’s how customs law works. The importer then decides whether to absorb that cost or pass it on to you through higher prices.
In fiscal year 2025, CBP collected $216.7 billion in tariff revenue. Every dollar came from a U.S. importer of record. That’s not my analysis. That’s the government’s own accounting.
Treasury Secretary Scott Bessent confirmed this on MSNBC in August 2025. When asked who pays tariffs, he said: “Well, the check is written to the person who receives it at the dock, in the U.S.”
So the mechanical question — who writes the check — has a clear answer. The more interesting question is: does the foreign exporter lower their price enough to offset the tariff, so the American consumer doesn’t feel it?
That’s what the studies looked at.
The Federal Reserve studies
Not one study. Seven.
1. The New York Federal Reserve — “Who Is Paying for the 2025 U.S. Tariffs?” (February 2026)
Researchers Mary Amiti, Chris Flanagan, Sebastian Heise, and Columbia economist David Weinstein analyzed trade data from January through November 2025. Their finding: U.S. firms and consumers paid 94% of the tariff costs from January through August. By November, that dropped to 86% — meaning foreign exporters absorbed at most 14%.
Their words: “Our results show that the bulk of the tariff incidence continues to fall on U.S. firms and consumers.”
For every 10% tariff increase, foreign exporters lowered their prices by only 0.6 to 1.4 percentage points. The rest landed on American buyers.
2. The Federal Reserve Board — “Detecting Tariff Effects on Consumer Prices in Real Time, Part II” (April 2026)
Researchers Robert Minton, Madeleine Ray, and Mariano Somale tracked consumer prices through February 2026. They found that tariffs raised core goods prices by 3.1%. Their phrase for the pass-through rate: “full dollar-for-dollar.” Meaning: if the tariff added a dollar to the import cost, the consumer paid a dollar more. At approximately seven months after implementation, the pass-through was “effectively complete.”
Their most striking finding: tariffs “explain the entirety of excess inflation in the core goods category.” Without tariffs, goods inflation would have returned to pre-pandemic levels.
3. The Federal Reserve Board — “The Slow Climb: How Tariffs Gradually Raised Retail Prices in 2025” (March 2026)
This one used item-level retail price data from 200,000 U.S. households. Chinese imports rose 8.5% year-over-year. Goods from other countries rose over 5%. U.S.-made products stayed below 2%. The pattern was gradual — “prices of everyday household items began increasing a few months after tariffs were implemented” — but relentless.
4. The Dallas Federal Reserve — “Effects of Realized Tariff Changes on PCE Prices” (May 2026)
The Dallas Fed looked at what actually happened to prices using realized tariff rates — meaning the duties that were actually collected, not just the rates that were announced. Their finding: “If retailers’ acquisition costs for a good rise $1 because of 5. The San Francisco Federal Reserve — “The Effects of Tariffs on the Components of Inflation” (March 2026)
A 10% tariff increased goods prices by approximately 1.2 percentage points, peaking at year two. And here’s the part that surprised me: tariff costs eventually bleed into services too. Services inflation showed a delayed response, peaking at year three. Tariffs don’t just raise the price of things. They raise the price of everything that uses things.
6. The Richmond Federal Reserve — “US Import Tariffs in 2025” (Working Paper 26-08)
Pass-through of tariffs into import prices was “close to one hundred percent.” Foreign exporters made “negligible adjustments” to their prices.
7. Federal Reserve Governor Waller — Speech, April 17, 2026
Governor Waller said that after removing tariff impacts from published inflation numbers, underlying inflation was approaching the Fed’s 2% target. Tariffs were the primary reason inflation stayed above target. Without them, we’d be where the Fed wanted us to be.
The peer-reviewed academic research
These went through the full academic review process — submitted, critiqued by other economists, revised, and published in top journals. This is the gold standard for economic evidence.
Amiti, Redding, and Weinstein (Journal of Economic Perspectives, Fall 2019): Analyzed the 2018 tariffs. “The full incidence of the tariff falls on domestic consumers, with a reduction in U.S. real income of $1.4 billion per month.” Complete pass-through.
Cavallo and Gopinath (American Economic Review: Insights, 2021): “This nearly complete passthrough of tariffs to the total price paid by importers suggests the tariff incidence has fallen largely on the US.” Gopinath later became Chief Economist of the International Monetary Fund.
Flaaen, Hortaçsu, and Tintelnot (American Economic Review, 2020): The washing machine study. This one’s worth pausing on.
The washing machine that explains everything
In 2018, the government put tariffs on imported washing machines. University of Chicago and Federal Reserve economists tracked exactly what happened.
Washing machine prices rose 12%. But here’s the twist — dryer prices rose 12% too. Dryers weren’t subject to tariffs at all. Manufacturers figured that if everything’s confusing, they could raise prices on both.
The tariffs created 1,800 American jobs. Good.
They cost American consumers $1.5 billion per year. The Treasury collected $82 million.
That’s $820,000 per job created. Per year. Paid by American families buying washing machines and dryers.
This was published in the American Economic Review. It’s not an opinion. It’s math.
The non-partisan institutions
The Congressional Budget Office — “Updated Projections of Tariff Effects” (November 2025): U.S. consumers bear 95% of the cost of 2025 tariffs. The CBO is the non-partisan scorekeeper Congress relies on for budget analysis. They don’t have a political agenda. Their job is math.
The Yale Budget Lab — Tariff Tracker: Estimated $1,800 to $2,400 per household in 2025. And they found something important about who gets hurt most: the bottom 10% of earners lost 2.7% of their income to tariffs. The top 10% lost 0.8%. Same tariff. Three times the pain if you’re poor.
The Tax Foundation — Tariff Tracker: $1,000 to $1,500 per household. The Tax Foundation is widely respected by both parties.
The Tax Policy Center — Tariff Tracker: The bottom 20% of earners saw their federal tax rate rise by 1.9 percentage points from tariffs alone. The tariff is functionally a sales tax on imported goods — and like all sales taxes, it takes a bigger bite from smaller paychecks.
The Joint Economic Committee — “Families to Pay $2,500+” (March 2026): Using Treasury revenue data and CBO methodology, they calculated that if tariff collections continued at January 2026 levels, American families would pay over $2,500 each in 2026. Their earlier report documented that families had already paid $1,745 each through January.
I should note: the JEC reports come from Democratic staff. But their methodology is transparent — they used Treasury’s own revenue numbers and CBO’s pass-through estimates. You can check their math.
Here is a video I made in 2024.
Why I’m writing this
I don’t write about politics. I’ve spent 30 years sitting across the kitchen table from people who are scared about money, and politics is rarely the thing that helps them.
But I write about financial literacy. And financial literacy means understanding where your money goes, who took it, and whether what you were told about it was accurate.
You were told foreign countries would pay the tariffs. Every major research institution in the country — institutions that span the political spectrum from the American Enterprise Institute to the Center for American Progress — found that you paid them.
This isn’t about blame. It’s about the habit of accepting financial claims without checking. And that habit will cost you far more than tariffs ever will.
The next time someone tells you a policy “won’t cost you anything” — whether it’s a tariff, a tax plan, a new fee structure, or a debt relief program — I want you to ask one question: where’s the study?
Not the press conference. Not the tweet. Not the talking point you heard so many times you stopped questioning it. The peer-reviewed, independently verified, show-your-math study.
Every link in this email is a primary source. I’m not asking you to believe me. I’m asking you to read them and decide for yourself.
That’s financial literacy. That’s what nobody profits from teaching you.
Steve Rhode has been helping people get out of debt since 1994. He founded one of the first nonprofit credit counseling organizations in the U.S. and has been featured in the Washington Post, New York Times, and on NBC, CBS, and NPR. Read more at GetOutOfDebt.org.
Primary sources referenced in this article
Federal Reserve Studies:
Peer-Reviewed Academic Papers:
Government & Non-Partisan: