MAGA Goon Threatens Researchers Over Ugly Trump Tariff Numbers
Tamilore Oshikanlu
Wed, February 18, 2026
President Donald Trump’s op economic adviser is lashing out at Federal Reserve researchers after a new study undercut one of the administration’s core talking points on tariffs.
Kevin Hassett, director of the National Economic Council, went on a tirade Wednesday morning during an appearance on CNBC’s Squawk Box, blasting a Federal Reserve Bank of New York paper that found Americans—not foreign exporters—are footing the overwhelming cost of Trump’s tariffs.
“The paper is an embarrassment,” Hassett, 63, said of the study. He went further, calling it “the worst paper I’ve ever seen in the history of the Federal Reserve system” and suggesting that the authors behind it should be “disciplined” for their findings.
Kevin Hassett appeared on CNBC 'Squawk Box' defending Trump's tariffs. / CNBC Squawk Box
The study, published Feb. 12 by the New York Fed, examined whether tariffs imposed at the start of Trump’s second term were successfully forcing foreign exporters to lower prices. Instead, researchers found the opposite: roughly 90 percent of tariff costs are being passed on to U.S. consumers and businesses.
That conclusion directly contradicts Trump’s repeated claims that tariffs strengthen the economy without hurting Americans. The president, 79, has touted the policy as both an economic and national security win, writing in a recent Truth Social rant that “TARIFFS have given us Economic and National Security.”
Reached for comment, White House spokesperson Kush Desai blasted the analysis.
“Kevin Hassett is right: the New York Fed’s tariff report is the latest ‘study’ that does not match reality or hold up to any scrutiny. The average American tariff has increased nearly sevenfold in the past year, while inflation cooled, real wages increased, and economic growth accelerated – the exact opposite of what the ‘experts’ and a growing body of ‘studies’ said would happen. More pointless reports are not going to change the fact that President Trump was right and the Panican experts were, and remain, wrong."
When questioned by Squawk Box host Joe Kernen, 70, on American consumers eating the cost of tariffs, Hassett dismissed the Fed’s analysis as politically motivated. He argued the findings had fueled “highly partisan” coverage and claimed the paper relied on flawed assumptions that “wouldn’t be accepted in a first semester econ class.”
Pressed on who actually bears the burden of tariffs, Hassett insisted the study was too narrow—faulting it for focusing primarily on price changes while ignoring broader economic dynamics like supply and demand interactions and shifts in consumer and producer behavior.
Instead, he offered a far rosier picture of the administration’s policy, claiming tariffs have ultimately benefited Americans. “Real wages were up $1,400 on average last year,” Hassett said, arguing that American consumers are “better off” despite rising import costs.
The New York Fed declined to comment on Hassett’s remarks.
Kevin Hassett stands firm behind President Donald Trump on his tariff policies. / Kevin Dietsch / Getty Images
Trump has made tariffs a cornerstone of his second term, dramatically increasing duties on imports from countries including China, Mexico, and Canada. Since last year, average tariff rates have jumped from roughly 2.6 percent to about 13 percent, according to the study.
But the policy has triggered a cascade of consequences—both economic and political.
Canada, one of the countries hit by the tariffs, has already responded with retaliatory measures, including pulling U.S. alcohol from shelves in Ontario’s government-run liquor stores. The escalating trade tensions have added strain to relations between the two longtime allies.
Tensions between Canada's Prime Minister Mark Carney and U.S. President Donald Trump have heightened over tariff disputes. / BRENDAN SMIALOWSKI / AFP via Getty Images
Back in Washington, Trump is also facing mounting resistance from within his own party. In a notable rebuke last Tuesday, six House Republicans joined Democrats in voting to end the emergency tariffs imposed on Canada.
The vote marked an unusual crack in GOP unity on one of Trump’s signature policies—and the president did not take it lightly.
In a fiery Truth Social post, Trump warned that Republicans who opposed him could face consequences in upcoming midterm elections, signaling he’s prepared to punish within his own ranks.
Even within the Trump administration, there are signs that officials may be quietly reconsidering parts of the tariff strategy.
U.S. Trade Representative Jamieson Greer, 46, suggested Tuesday during an interview on Squawk Box that some tariffs—particularly on steel and aluminum—could be adjusted for companies struggling to comply with the steep duties.
Meanwhile, Canadian officials are gearing up for what could be a contentious round of negotiations. Prime Minister Mark Carney, 60, announced on Monday that veteran diplomat Janice Charette will serve as the country’s chief trade negotiator in upcoming free-trade agreement talks with the United States.
Tamilore Oshikanlu
Wed, February 18, 2026
President Donald Trump’s op economic adviser is lashing out at Federal Reserve researchers after a new study undercut one of the administration’s core talking points on tariffs.
Kevin Hassett, director of the National Economic Council, went on a tirade Wednesday morning during an appearance on CNBC’s Squawk Box, blasting a Federal Reserve Bank of New York paper that found Americans—not foreign exporters—are footing the overwhelming cost of Trump’s tariffs.
“The paper is an embarrassment,” Hassett, 63, said of the study. He went further, calling it “the worst paper I’ve ever seen in the history of the Federal Reserve system” and suggesting that the authors behind it should be “disciplined” for their findings.
Kevin Hassett appeared on CNBC 'Squawk Box' defending Trump's tariffs. / CNBC Squawk Box
The study, published Feb. 12 by the New York Fed, examined whether tariffs imposed at the start of Trump’s second term were successfully forcing foreign exporters to lower prices. Instead, researchers found the opposite: roughly 90 percent of tariff costs are being passed on to U.S. consumers and businesses.
That conclusion directly contradicts Trump’s repeated claims that tariffs strengthen the economy without hurting Americans. The president, 79, has touted the policy as both an economic and national security win, writing in a recent Truth Social rant that “TARIFFS have given us Economic and National Security.”
Reached for comment, White House spokesperson Kush Desai blasted the analysis.
“Kevin Hassett is right: the New York Fed’s tariff report is the latest ‘study’ that does not match reality or hold up to any scrutiny. The average American tariff has increased nearly sevenfold in the past year, while inflation cooled, real wages increased, and economic growth accelerated – the exact opposite of what the ‘experts’ and a growing body of ‘studies’ said would happen. More pointless reports are not going to change the fact that President Trump was right and the Panican experts were, and remain, wrong."
When questioned by Squawk Box host Joe Kernen, 70, on American consumers eating the cost of tariffs, Hassett dismissed the Fed’s analysis as politically motivated. He argued the findings had fueled “highly partisan” coverage and claimed the paper relied on flawed assumptions that “wouldn’t be accepted in a first semester econ class.”
Pressed on who actually bears the burden of tariffs, Hassett insisted the study was too narrow—faulting it for focusing primarily on price changes while ignoring broader economic dynamics like supply and demand interactions and shifts in consumer and producer behavior.
Instead, he offered a far rosier picture of the administration’s policy, claiming tariffs have ultimately benefited Americans. “Real wages were up $1,400 on average last year,” Hassett said, arguing that American consumers are “better off” despite rising import costs.
The New York Fed declined to comment on Hassett’s remarks.
Kevin Hassett stands firm behind President Donald Trump on his tariff policies. / Kevin Dietsch / Getty Images
Trump has made tariffs a cornerstone of his second term, dramatically increasing duties on imports from countries including China, Mexico, and Canada. Since last year, average tariff rates have jumped from roughly 2.6 percent to about 13 percent, according to the study.
But the policy has triggered a cascade of consequences—both economic and political.
Canada, one of the countries hit by the tariffs, has already responded with retaliatory measures, including pulling U.S. alcohol from shelves in Ontario’s government-run liquor stores. The escalating trade tensions have added strain to relations between the two longtime allies.
Tensions between Canada's Prime Minister Mark Carney and U.S. President Donald Trump have heightened over tariff disputes. / BRENDAN SMIALOWSKI / AFP via Getty Images
Back in Washington, Trump is also facing mounting resistance from within his own party. In a notable rebuke last Tuesday, six House Republicans joined Democrats in voting to end the emergency tariffs imposed on Canada.
The vote marked an unusual crack in GOP unity on one of Trump’s signature policies—and the president did not take it lightly.
In a fiery Truth Social post, Trump warned that Republicans who opposed him could face consequences in upcoming midterm elections, signaling he’s prepared to punish within his own ranks.
Even within the Trump administration, there are signs that officials may be quietly reconsidering parts of the tariff strategy.
U.S. Trade Representative Jamieson Greer, 46, suggested Tuesday during an interview on Squawk Box that some tariffs—particularly on steel and aluminum—could be adjusted for companies struggling to comply with the steep duties.
Meanwhile, Canadian officials are gearing up for what could be a contentious round of negotiations. Prime Minister Mark Carney, 60, announced on Monday that veteran diplomat Janice Charette will serve as the country’s chief trade negotiator in upcoming free-trade agreement talks with the United States.
Naomi Buchanan
Wed, February 18, 2026
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Trump's top economic advisor said Fed economists behind a recent report on tariffs should be "disciplined."
The report from the New York Fed found that Americans bear 90% the economic burden of tariffs.
Economists voiced worries about the comments and what they mean for Fed independence.
Donald Trump's economic advisor said that Federal Reserve writers behind a report claiming that Americans bear the brunt of tariffs should be "disciplined."
Kevin Hassett, the director of the National Economic Council, criticized the Federal Reserve Bank of New York's economic analysis of the impact of tariffs published last week, calling for the authors to be punished for their findings.
"The paper is an embarrassment. It's, I think, the worst paper I've ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined because what they've done is put out a conclusion which has created a lot of news that's highly partisan based on analysis that wouldn't be accepted in a first semester econ class," Hassett told CNBC.
The economists found that 90% of the economic burden of higher tariffs fell on US firms and consumers. The average tariff rate climbed to 13% from 2.6% in 2025 as part of Trump's sweeping trade policy unveiled last April.
"While importers pay the duty, the 'economic burden' of the tariff can be shifted onto exporters if they lower their export prices," the report reads. "There is 100 percent pass-through from tariffs to import prices, and therefore on U.S. consumers and firms," the economists explained in the write.
Hassett defended the tariffs in his comments to CNBC.
"The basic theory of President Trump's tariffs is that, sure we're importing stuff from China, but we've got producers in the US that make the same stuff, maybe at a slightly higher price. If we bring the stuff home, create the demand at home, then that will hurt China and drive up wages in the US and American consumers be better off."
Hassett's remarks come as Fed independence is in focus. The Trump administration is in the midst of criminal investigations into Fed Chair Jerome Powell and Fed governor Lisa Cook.
Claudia Sahm, a former Fed economist who is known for creating the Sahm rule, a popular recession indicator, said the comments, specifically Hassett calling for the paper's authors to be disciplined, are "deeply disturbing."
She added that Kevin Warsh, Trump's nominee to replace Jerome Powell as Fed chair, "must" be asked about Hassett's comments at his confirmation hearing.
"The Fed Chair has the ability to suppress research from the Fed. Will he if it disagrees with White House?" Sahm wrote.
Steve Sosnick, chief strategist at Interactive Brokers, told Business Insider that Hassett's comments are "distressing."
"At best it's an angry outburst instead of a reasoned response, and at worst it is meant to chill speech and curb central bank independence," he added.
Kashkari Rips Hassett Criticism of NY Fed Tariff Analysis
Catarina Saraiva
Thu, February 19, 2026
Bloomberg
(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said recent comments by National Economic Council Director Kevin Hassett critical of a New York Fed study on tariffs undermine the central bank’s independence.
“This is just another step to try to compromise the Fed’s independence,” Kashkari said Thursday at an event in Fargo, North Dakota, of Hassett’s remarks. “Over the last year we’ve seen multiple attempts to try to compromise the Fed’s independence.” He added, “It’s really about monetary policy.”
(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari said recent comments by National Economic Council Director Kevin Hassett critical of a New York Fed study on tariffs undermine the central bank’s independence.
“This is just another step to try to compromise the Fed’s independence,” Kashkari said Thursday at an event in Fargo, North Dakota, of Hassett’s remarks. “Over the last year we’ve seen multiple attempts to try to compromise the Fed’s independence.” He added, “It’s really about monetary policy.”
Federal Reserve Bank of Minneapolis President Neel Kashkari criticizes National Economic Council Director Kevin Hassett’s comments about a New York Fed study on tariffs.
Source: Bloomberg
Hassett on Wednesday said the New York Fed economists’ study, which found US companies bear most of the burden from President Donald Trump’s tariff hikes, was “an embarrassment” and that the researchers associated with it should be “disciplined.”
Kashkari said research conducted by Fed district banks reflect efforts “to get better and learn about the economy — by having this breadth of opinions.”
“We are doing our very best to make the best assessment of the economy based on data and analysis,” the Minneapolis Fed chief said.
‘Hug the Mast’
Kashkari also pointed to the current Justice Department investigation of the Fed over building renovations as evidence of Trump administration pressure. Chair Jerome Powell in January said, when served subpoenas, that the reasons for the investigation were a pretext to punish him for not cutting interest rates quickly enough. Trump has repeatedly said the Fed should cut rates aggressively.
“The louder the noise gets turned up, the more we hug the mast of what is our mission,” Kashkari said, citing the Fed’s mandate to achieve price stability and maximum employment.
The Minneapolis Fed chief was also asked about Kevin Warsh, whom Trump has said he’ll nominate to be the next Fed chair. Powell’s term expires in May. Warsh has repeatedly criticized various elements of the Fed and said he wants to revamp the institution.
“I look forward to working with him and hearing his ideas,” said Kashkari, who worked with Warsh during the financial crisis. “We can always do better. If we’ve got good ideas on how to improve things, let’s go take them forward.”
Balance Sheet
Warsh has said he wants to reduce the Fed’s balance sheet, which surged in size during both the financial crisis and the pandemic, when the Fed was buying assets to shore up the economy. Kashkari argued there are many technical reasons why the balance sheet — currently at $6.6 trillion — is much bigger today than it was before those crises, including foreign demand for US currency and the amount of reserves banks have to maintain at the Fed for liquidity purposes.
“We’ve shrunk our balance sheet quite a bit in the last few years, and I’m not sure that we can shrink it much further from here without making some other fundamental changes to the way the financial system operates,” he said.
On interest rates, Kashkari said the Fed’s benchmark is currently likely close to “neutral” — the point where they’re neither restricting the economy nor stimulating it. The Fed held rates unchanged at its January meeting, a decision Kashkari supported, after cutting them three consecutive times in the last few months of 2025.
--With assistance from Matt Shirley.
Most Read from Bloomberg Businessweek
Hassett on Wednesday said the New York Fed economists’ study, which found US companies bear most of the burden from President Donald Trump’s tariff hikes, was “an embarrassment” and that the researchers associated with it should be “disciplined.”
Kashkari said research conducted by Fed district banks reflect efforts “to get better and learn about the economy — by having this breadth of opinions.”
“We are doing our very best to make the best assessment of the economy based on data and analysis,” the Minneapolis Fed chief said.
‘Hug the Mast’
Kashkari also pointed to the current Justice Department investigation of the Fed over building renovations as evidence of Trump administration pressure. Chair Jerome Powell in January said, when served subpoenas, that the reasons for the investigation were a pretext to punish him for not cutting interest rates quickly enough. Trump has repeatedly said the Fed should cut rates aggressively.
“The louder the noise gets turned up, the more we hug the mast of what is our mission,” Kashkari said, citing the Fed’s mandate to achieve price stability and maximum employment.
The Minneapolis Fed chief was also asked about Kevin Warsh, whom Trump has said he’ll nominate to be the next Fed chair. Powell’s term expires in May. Warsh has repeatedly criticized various elements of the Fed and said he wants to revamp the institution.
“I look forward to working with him and hearing his ideas,” said Kashkari, who worked with Warsh during the financial crisis. “We can always do better. If we’ve got good ideas on how to improve things, let’s go take them forward.”
Balance Sheet
Warsh has said he wants to reduce the Fed’s balance sheet, which surged in size during both the financial crisis and the pandemic, when the Fed was buying assets to shore up the economy. Kashkari argued there are many technical reasons why the balance sheet — currently at $6.6 trillion — is much bigger today than it was before those crises, including foreign demand for US currency and the amount of reserves banks have to maintain at the Fed for liquidity purposes.
“We’ve shrunk our balance sheet quite a bit in the last few years, and I’m not sure that we can shrink it much further from here without making some other fundamental changes to the way the financial system operates,” he said.
On interest rates, Kashkari said the Fed’s benchmark is currently likely close to “neutral” — the point where they’re neither restricting the economy nor stimulating it. The Fed held rates unchanged at its January meeting, a decision Kashkari supported, after cutting them three consecutive times in the last few months of 2025.
--With assistance from Matt Shirley.
Most Read from Bloomberg Businessweek
Tariffs paid by midsize US companies tripled last year, a JPMorganChase Institute study shows
President Donald Trump visits Coosa Steel Corporation in Rome, Ga., Thursday, Feb. 19, 2026. (AP Photo/Mark Schiefelbein) · Associated Press Finance · ASSOCIATED PRESS
JOSH BOAK
JOSH BOAK
Thu, February 19, 2026 at 4:16 AM MST 4 min read
WASHINGTON (AP) — Tariffs paid by midsize U.S. businesses tripled over the course of past year, new research tied to one of America’s leading banks showed on Thursday — more evidence that President Donald Trump 's push to charge higher taxes on imports is causing economic disruption.
The additional taxes have meant that companies that employ a combined 48 million people in the U.S. — the kinds of businesses that Trump had promised to revive — have had to find ways to absorb the new expense, by passing it along to customers in the form of higher prices, employing fewer workers or accepting lower profits.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director of the JPMorganChase Institute, which published the analysis Thursday. “We also see some indications that they may be shifting away from transacting with China and maybe toward some other regions in Asia.”
The research does not say how the additional costs are flowing through the economy, but it indicates that tariffs are being paid by U.S. companies. The study is part of a growing body of economic analyses that counter the administration's claims that foreigners pay the tariffs.
The JPMorganChase Institute report used payments data to look at businesses that might lack the pricing power of large multinational companies to offset tariffs, but may be small enough to quickly change supply chains to minimize exposure to the tax increases. The companies tended to have revenues between $10 million and $1 billion with fewer than 500 employees, a category known as “middle market.”
The analysis suggests that the Trump administration’s goal of becoming less directly reliant on Chinese manufacturers has been occurring. Payments to China by these companies were 20% below their October 2024 levels, but it’s unclear whether that means China is simply routing its goods through other countries or if supply chains have moved.
The authors of the analysis emphasized in an interview that companies are still adjusting to the tariffs and said they plan to continue studying the issue.
White House spokesman Kush Desai called the analysis “pointless” and said it didn't “change the fact that President Trump was right.” The study showed that U.S. companies are paying tariffs that the president had previously claimed would be paid by foreign entities.
Trump defended his tariffs during a trip to Georgia on Thursday while touring Coosa Steel, a company involved in steel processing and distribution. The president said he couldn’t believe the Supreme Court would soon decide on the legality of some of his tariffs, given his belief that the taxes were helping U.S. manufacturers.
“The tariffs are the greatest thing to happen to this country,” Trump said.
The president imposed a series of tariffs last year for the ostensible goal of reducing the U.S. trade imbalance with other countries, so that America was not longer importing more than it exports. But trade data published Thursday by the Census Bureau showed that the trade deficit climbed last year by $25.5 billion to $1.24 trillion. The president on Wednesday posted on social media that he expected there would be a trade surplus “during this year.”
The Trump administration has been adamant that the tariffs are a boon for the economy, businesses, and workers. Kevin Hassett, director of the White House National Economic Council, lashed out on Wednesday at research by the New York Federal Reserve showing that nearly 90% of the burden for Trump's tariffs fell on U.S. companies and consumers.
“The paper is an embarrassment,” Hassett told CNBC. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined.”
Trump increased the average tariff rate to 13% from 2.6% last year, according to the New York Fed researchers. He declared that tariffs on some items such as steel, kitchen cabinets and bathroom vanities were in the national security interest of the country. He also declared an economic emergency to bypass Congress and impose a baseline tax on goods from much of the world in April 2025 at an event he called “Liberation Day.”
The high rates provoked a financial market panic, prompting Trump to walk back his rates and then engage in talks with multiple countries that led to a set of new trade frameworks. The Supreme Court is expected to rule soon on whether Trump surpassed his legal authority by declaring an economic emergency.
Trump was elected in 2024 on his promise to tame inflation, but his tariffs have contributed to voter frustration over affordability. While inflation has not spiked during Trump's term thus far, hiring slowed sharply and a team of academic economists estimate that consumer prices were roughly 0.8 percentage points higher than they would otherwise be.
Analysis by Allison Morrow, CNN
February 12, 2026
Nearly 90% of the cost of Trump's tariffs have been borne by American consumers and businesses, according to the New York Federal Reserve. - Nam Y. Huh/AP
A new report from the Federal Reserve Bank of New York confirms what economists have long warned about: The burden of tariffs is borne almost entirely by the people living in the country that imposes them.
That simple fact — now learned experientially in 21st century America — is an Econ 101 lesson as foundational as supply and demand. ’Twas ever thus!
US businesses and consumers last year paid for nearly 90% of 2025’s import taxes, the Fed branch found. That’s hardly surprising: The National Bureau of Economic Research and the Congressional Budget Office recently found roughly the same thing.
And while the New York Fed report didn’t parse the split between businesses and consumers, the CBO report, published Wednesday, estimated businesses would continue shrinking their margins slightly to offset the extra costs, while passing on the bulk of the levies — 70% — to consumers. (As for those foreign exporters President Donald Trump has long claimed would foot the bill? They’re taking on about 5%, the CBO estimates.)
In real dollar terms, the tariffs amounted to an average tax increase of $1,000 per household in 2025, according to the non-partisan Tax Foundation.
Now, on one hand, these are just your standard academic mumbo-jumbo papers published by a bunch of nerds, for a bunch of nerds. The collective wisdom of economists has never much mattered to Trump when it comes to “the most beautiful word to me in the dictionary,” as he once described tariffs.
But the CBO and New York Fed reports landed just as tariff fatigue is hitting hard in DC.
In a rare rebuke of Trump’s signature economic agenda, six House Republicans joined with Democrats on Wednesday in a vote that would effectively repeal his tariffs on Canada. The tariffs won’t get repealed, mind you, because even if it passed the Senate, Trump would just veto it. But the brushback from Trump’s own party members didn’t go over well in the West Wing, as one might have guessed. Shortly after the vote, Trump responded with a threat of “consequences” for “any Republican” in Congress who votes against tariffs.
Meanwhile, a Supreme Court ruling on the legality of Trump’s tariffs is due any day, potentially tossing his whole agenda into upheaval.
In a statement, White House spokesman Kush Desai defended the tariff agenda, noting inflation had cooled and corporate profits have gone up even as “America’s average tariff rate has increased nearly sevenfold.”
“The reality is that President Trump’s economic agenda of tax cuts, deregulation, tariffs, and energy abundance are reducing costs and accelerating economic growth,” he said.
Of course, all of that is happening as everyday Americans seethe over the cost of living and increasingly hold Trump and the Republicans responsible. Trump’s campaign message of lowering prices on “day one” simply hasn’t happened. (Except on a few items like eggs — we can give him the W on that one, largely because farmers worked really hard to snuff out the bird flu that was crimping egg supplies and driving up prices.)
On paper, the US economy is humming along nicely. That’s largely because the economy is measured in averages and aggregates.
Take, for example, the January jobs report released Wednesday. On the whole, it looked surprisingly strong, with 130,000 jobs added, nearly double what economists had expected. But if you zoom in, almost all of the gains came from one sector, health care. Zoom in a little more, and virtually every other sector showed either weak gains or losses. In fact, for all of 2025, health care and social assistance accounted for 97% of all the job growth.
That is a prime example of what economist Diane Swonk of KPMG has called the “one-legged stools” holding up the entire economy. Two other one-legged stools: Rich people doing shopping sprees, and giant tech companies shelling out hundreds of billions on AI infrastructure.
For more CNN.com
90% of Trump’s tariffs are paid for by American consumers and companies, New York Fed says
A new report from the Federal Reserve Bank of New York confirms what economists have long warned about: The burden of tariffs is borne almost entirely by the people living in the country that imposes them.
That simple fact — now learned experientially in 21st century America — is an Econ 101 lesson as foundational as supply and demand. ’Twas ever thus!
US businesses and consumers last year paid for nearly 90% of 2025’s import taxes, the Fed branch found. That’s hardly surprising: The National Bureau of Economic Research and the Congressional Budget Office recently found roughly the same thing.
And while the New York Fed report didn’t parse the split between businesses and consumers, the CBO report, published Wednesday, estimated businesses would continue shrinking their margins slightly to offset the extra costs, while passing on the bulk of the levies — 70% — to consumers. (As for those foreign exporters President Donald Trump has long claimed would foot the bill? They’re taking on about 5%, the CBO estimates.)
In real dollar terms, the tariffs amounted to an average tax increase of $1,000 per household in 2025, according to the non-partisan Tax Foundation.
Now, on one hand, these are just your standard academic mumbo-jumbo papers published by a bunch of nerds, for a bunch of nerds. The collective wisdom of economists has never much mattered to Trump when it comes to “the most beautiful word to me in the dictionary,” as he once described tariffs.
But the CBO and New York Fed reports landed just as tariff fatigue is hitting hard in DC.
In a rare rebuke of Trump’s signature economic agenda, six House Republicans joined with Democrats on Wednesday in a vote that would effectively repeal his tariffs on Canada. The tariffs won’t get repealed, mind you, because even if it passed the Senate, Trump would just veto it. But the brushback from Trump’s own party members didn’t go over well in the West Wing, as one might have guessed. Shortly after the vote, Trump responded with a threat of “consequences” for “any Republican” in Congress who votes against tariffs.
Meanwhile, a Supreme Court ruling on the legality of Trump’s tariffs is due any day, potentially tossing his whole agenda into upheaval.
In a statement, White House spokesman Kush Desai defended the tariff agenda, noting inflation had cooled and corporate profits have gone up even as “America’s average tariff rate has increased nearly sevenfold.”
“The reality is that President Trump’s economic agenda of tax cuts, deregulation, tariffs, and energy abundance are reducing costs and accelerating economic growth,” he said.
Of course, all of that is happening as everyday Americans seethe over the cost of living and increasingly hold Trump and the Republicans responsible. Trump’s campaign message of lowering prices on “day one” simply hasn’t happened. (Except on a few items like eggs — we can give him the W on that one, largely because farmers worked really hard to snuff out the bird flu that was crimping egg supplies and driving up prices.)
On paper, the US economy is humming along nicely. That’s largely because the economy is measured in averages and aggregates.
Take, for example, the January jobs report released Wednesday. On the whole, it looked surprisingly strong, with 130,000 jobs added, nearly double what economists had expected. But if you zoom in, almost all of the gains came from one sector, health care. Zoom in a little more, and virtually every other sector showed either weak gains or losses. In fact, for all of 2025, health care and social assistance accounted for 97% of all the job growth.
That is a prime example of what economist Diane Swonk of KPMG has called the “one-legged stools” holding up the entire economy. Two other one-legged stools: Rich people doing shopping sprees, and giant tech companies shelling out hundreds of billions on AI infrastructure.
For more CNN.com
90% of Trump’s tariffs are paid for by American consumers and companies, New York Fed says
President Donald Trump has said foreign exporters will pay for his tariffs, but new New York Fed data indicates the contrary is happening. · Fortune · Tom Williams/CQ-Roll Call, Inc—Getty Images
Sasha Rogelberg
Fri, February 13, 202
Despite President Donald Trump insisting it’s foreign businesses paying for his raft of tariffs, mounting data indicates that, actually, American households and businesses are footing the bill for his import taxes.
A Federal Reserve Bank of New York report released Thursday, using data from the U.S. Census Bureau and Foreign Trade Statistics through November 2025, found Americans paid for nearly 90% of the tariffs in 2025, including 94% of the levies from January to August of last year, 92% from September to October, and 86% in November.
“Our results show that the bulk of the tariff incidence continues to fall on U.S. firms and consumers,” the economists wrote. Americans “continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.”
The report authors—Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein—explained in their report that over the course of 2025, average tariff rates quintupled from 2.6% to 13%. If foreign firms were the ones paying for the levies, it would be reflected in those companies having to lower prices in order for them to remain the same on American soil once the taxes were applied. Instead, their data reflects that companies exporting to the U.S. have only modestly decreased their prices, leaving it to domestic companies to absorb the increased costs or pass them down to consumers.
Trump has repeatedly asserted other countries looking to export goods to the U.S. are the ones paying for the tariffs. In a Wall Street Journal op-ed last month, Trump said: “The data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen, including large corporations that are not from the U.S.”
The president’s declaration on the tariffs’ success comes as his trade policy undergoes increased scrutiny. On Wednesday, the House of Representatives passed a resolution, with the support of three Republicans, to overturn the tariffs imposed on Canada out of economic concern. Meanwhile, the Trump administration is awaiting an imminent ruling from the Supreme Court, which will determine the legality of the tariffs on the basis of the International Emergency Economic Powers Act.
Americans have taken note of higher prices as a result of tariffs, and last month, consumer confidence sank to its lowest level in more than 11 years, with survey respondents citing tariffs as one reason for this anxiety.
“Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism,” Conference Board Chief Economist Dana Peterson said in a statement. “References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated. Mentions of tariffs and trade, politics, and the labor market also rose in January, and references to health/insurance and war edged higher.”
“America’s average tariff rate has increased nearly sevenfold in the past year–yet inflation has cooled and corporate profits have increased,” White House spokesperson Kush Desai said in a statement to Fortune. “The reality is that President Trump’s economic agenda of tax cuts, deregulation, tariffs, and energy abundance are reducing costs and accelerating economic growth.”
Writing on the wall
The tariffs’ impact on American businesses and consumers follows a pattern seen in the tariff impact from Trump’s first term. A 2019 study from the Journal of Economic Perspectives found Americans were paying the full incidence, or cost, of tariffs through 2018, which amounted to an estimated reduction of $1.4 billion per month in aggregate U.S. real income through 2018.
The New York Fed report this week similarly mirrors data from myriad sources, including from the Harvard Business School’s Tariff Tracker, which found that through October 2025, the levies added 0.76% to the Consumer Price Index, or U.S. inflation. The Kiel Institute likewise found foreign exports were absorbing only 4% of the tariff burden, leaving 96% to be eaten by U.S. buyers.
U.S. business leaders have been sounding the alarm on tariffs for months for this exact reason, claiming it would be domestic businesses making the call to either absorb costs at the expense of their own margins, or pass down costs to customers.
Procter & Gamble announced in July 2025 it would raise prices on some of its household products like diapers and skincare due to tariffs. General Motors reported the same month a $1.1 billion profit hit as a result of the levies.
“There’s not much you can do,” Bernstein senior analyst Daniel Roeska told Fortune in July. “If the policy is to put tariffs on cars, then that will increase the cost of cars, and ultimately, that will likely increase the price of cars.”
Taken together, the burden of these levies have outweighed the benefits Trump has claimed the taxes will fund, according to some economists. The president has claimed tariff revenue will pay off the country’s staggering $38 trillion national debt and the administration will be able to dole out $2,000 rebate checks to Americans and provide tax cuts.
Nonpartisan think tank the Tax Foundation found earlier this month the costs of tariffs for U.S. households exceed the benefit of a tax break. The group previously estimated Trump’s tax cut would increase the average return by $1,000 from last year, but calculated that the tariff burden for Americans would swell to $1,300 in 2026, wiping out any benefit from the cuts.
“Tariffs are really holding back the potential of the new tax law, both to deliver relief to taxpayers and to grow the economy,” Erica York, vice president of federal tax policy at the Tax Foundation, told Fortune.
This story was originally featured on Fortune.com
Despite President Donald Trump insisting it’s foreign businesses paying for his raft of tariffs, mounting data indicates that, actually, American households and businesses are footing the bill for his import taxes.
A Federal Reserve Bank of New York report released Thursday, using data from the U.S. Census Bureau and Foreign Trade Statistics through November 2025, found Americans paid for nearly 90% of the tariffs in 2025, including 94% of the levies from January to August of last year, 92% from September to October, and 86% in November.
“Our results show that the bulk of the tariff incidence continues to fall on U.S. firms and consumers,” the economists wrote. Americans “continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.”
The report authors—Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein—explained in their report that over the course of 2025, average tariff rates quintupled from 2.6% to 13%. If foreign firms were the ones paying for the levies, it would be reflected in those companies having to lower prices in order for them to remain the same on American soil once the taxes were applied. Instead, their data reflects that companies exporting to the U.S. have only modestly decreased their prices, leaving it to domestic companies to absorb the increased costs or pass them down to consumers.
Trump has repeatedly asserted other countries looking to export goods to the U.S. are the ones paying for the tariffs. In a Wall Street Journal op-ed last month, Trump said: “The data shows that the burden, or ‘incidence,’ of the tariffs has fallen overwhelmingly on foreign producers and middlemen, including large corporations that are not from the U.S.”
The president’s declaration on the tariffs’ success comes as his trade policy undergoes increased scrutiny. On Wednesday, the House of Representatives passed a resolution, with the support of three Republicans, to overturn the tariffs imposed on Canada out of economic concern. Meanwhile, the Trump administration is awaiting an imminent ruling from the Supreme Court, which will determine the legality of the tariffs on the basis of the International Emergency Economic Powers Act.
Americans have taken note of higher prices as a result of tariffs, and last month, consumer confidence sank to its lowest level in more than 11 years, with survey respondents citing tariffs as one reason for this anxiety.
“Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism,” Conference Board Chief Economist Dana Peterson said in a statement. “References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated. Mentions of tariffs and trade, politics, and the labor market also rose in January, and references to health/insurance and war edged higher.”
“America’s average tariff rate has increased nearly sevenfold in the past year–yet inflation has cooled and corporate profits have increased,” White House spokesperson Kush Desai said in a statement to Fortune. “The reality is that President Trump’s economic agenda of tax cuts, deregulation, tariffs, and energy abundance are reducing costs and accelerating economic growth.”
Writing on the wall
The tariffs’ impact on American businesses and consumers follows a pattern seen in the tariff impact from Trump’s first term. A 2019 study from the Journal of Economic Perspectives found Americans were paying the full incidence, or cost, of tariffs through 2018, which amounted to an estimated reduction of $1.4 billion per month in aggregate U.S. real income through 2018.
The New York Fed report this week similarly mirrors data from myriad sources, including from the Harvard Business School’s Tariff Tracker, which found that through October 2025, the levies added 0.76% to the Consumer Price Index, or U.S. inflation. The Kiel Institute likewise found foreign exports were absorbing only 4% of the tariff burden, leaving 96% to be eaten by U.S. buyers.
U.S. business leaders have been sounding the alarm on tariffs for months for this exact reason, claiming it would be domestic businesses making the call to either absorb costs at the expense of their own margins, or pass down costs to customers.
Procter & Gamble announced in July 2025 it would raise prices on some of its household products like diapers and skincare due to tariffs. General Motors reported the same month a $1.1 billion profit hit as a result of the levies.
“There’s not much you can do,” Bernstein senior analyst Daniel Roeska told Fortune in July. “If the policy is to put tariffs on cars, then that will increase the cost of cars, and ultimately, that will likely increase the price of cars.”
Taken together, the burden of these levies have outweighed the benefits Trump has claimed the taxes will fund, according to some economists. The president has claimed tariff revenue will pay off the country’s staggering $38 trillion national debt and the administration will be able to dole out $2,000 rebate checks to Americans and provide tax cuts.
Nonpartisan think tank the Tax Foundation found earlier this month the costs of tariffs for U.S. households exceed the benefit of a tax break. The group previously estimated Trump’s tax cut would increase the average return by $1,000 from last year, but calculated that the tariff burden for Americans would swell to $1,300 in 2026, wiping out any benefit from the cuts.
“Tariffs are really holding back the potential of the new tax law, both to deliver relief to taxpayers and to grow the economy,” Erica York, vice president of federal tax policy at the Tax Foundation, told Fortune.
This story was originally featured on Fortune.com
