Published 01/22/2026 12:59 | Edited 01/22/2026 13:33
The Donald Trump administration’s protectionist policy, based on the premise that import tariffs would be paid by foreign governments and companies, suffered a severe setback. A detailed study by Germany’s Kiel Institute for the World Economy (IfW Kiel) reveals that the cost of these duties fell almost entirely on the shoulders of North American consumers and importers themselves.
According to the document “US Own Goal: Who Pays the Tariffs?” (“America’s Own Goal: Who Pays the Tariffs?”), foreign exporters absorbed only 4% of the burden of tariffs. The other 96% was passed directly to final prices in the United States, functioning, in practice, as a tax on domestic consumption.
The foreign payment myth
The Kiel Institute analysis used 25 million shipping records covering $4 trillion in trade. The result shows that the US Treasury collected around US$200 billion extra in 2025. This amount represented a transfer of wealth from US citizens to the government, not a charge on foreign nations.
The White House believed the tariffs would force exporting countries to lower their prices, but data shows the opposite occurred. The study reveals that the global market was resilient. Exporters from countries such as Brazil and India maintained unit prices and redirected surpluses to other trading blocs rather than giving in to pressure. Export prices remained stable despite aggressive 50% tariffs on Brazilian and Indian products. Customs costs were passed on to importers and left the American buyer with inflated prices or shortages.
The prediction was correct: the onus fell on the USA
The data corroborates the warnings made by the National Confederation of Industry (CNI), still in mid-2025, that “the United States would be the main losers”. The CNI estimate of a 0.37% drop in US GDP was confirmed as the biggest negative impact among the nations involved.
The cost of the barriers drained the dynamism of the US economy and was greater than the losses of trading partners. As the US is dependent on global inputs, the surcharge makes domestic production more expensive, making products “made in USA” less competitive on the global market and more expensive domestically.
Source: vermelho.org.br
