Oct. 13 (UPI) — U.S. consumers will likely pay for more than half the cost of tariffs this year through higher prices, according to a new Goldman Sachs analysis.
Goldman Sachs economists predicted Sunday that U.S. companies will shoulder 22% of the tariffs, implemented by President Donald Trump six months ago, with foreign exporters taking an 18% hit by cutting prices.
“If recently implemented and future tariffs have the same eventual impact on prices as the tariffs implemented earlier this year, then U.S. consumers would eventually absorb 55% of tariff costs,” according to economists.
“At the moment, however, U.S. businesses are likely bearing a larger share of the costs because some tariffs have just gone into effect and it takes time to raise prices on consumers and negotiate lower import prices with foreign suppliers.”
Trump unveiled his tariff plan in April to boost domestic industry and reshape U.S. trade in what he touted was “Liberation Day,” vowing that foreign countries would bear the costs.
Since then, Trump has implemented tariffs on automobiles, auto parts, copper, steel and aluminum, while also placing tariffs on specific countries, including China.
“The president and administration’s position has always been clear: while Americans may face a transition period from tariffs upending a broken status quo that has put Americans last, the cost of tariffs will ultimately be borne by foreign exporters,” White House spokesman Kush Desai said in a statement.
“Companies are already shifting and diversifying their supply chains in response to tariffs including by on-shoring production to the United States,” Desai added.
Goldman Sachs’ recent analysis did not take into account Trump’s threat Friday to impose a 100% tariff on goods from China. Those tariffs are set to take effect on Nov. 1, and will increase levies from 30% after Beijing’s Commerce Ministry announced tightened export restrictions on rare earth items and materials.
China responded to Trump’s latest tariff threat by vowing retaliation and warning it is not “afraid of a tariff war.”
The Trump administration said the United States has received billions in revenue from tariffs this year. Trump said they are weighing what to do with the $215 billion in new revenue and could send rebate checks to U.S. households, subsidize manufacturers or fund food subsidies, impacted by the recent government shutdown.
