Kiel Institute Finds US Consumers Bear 96% of Tariff Costs

A study by the Kiel Institute for the World Economy determined that American businesses and consumers bear approximately 96% of the costs associated with tariffs imposed by President Donald Trump. Analyzing 25 million shipment records valued at $4 trillion, the institute found that foreign exporters bore only 4% of the burden, primarily by reducing export volumes rather than lowering prices. The research characterizes the $200 billion surge in 2025 customs revenue as a consumption tax extracted from American households and businesses, contradicting administration claims that tariffs generate revenue from foreign entities to reduce the national deficit.

Amidst these findings, Donald Trump expanded trade pressures by announcing a 25% import duty on goods from India, alongside penalties for India's purchase of Russian oil and defense equipment. He further announced a 10% import tax starting in February on eight European countries, citing their opposition to U.S. control of Greenland.

Critics and analysts have challenged the efficacy of these policies. Matt Winkler, Editor-in-Chief Emeritus of Bloomberg News, described the tariffs as punitive and counterproductive, noting that India experienced its largest five-month export decline since 1960 between April and August 2025. While the administration suggested tariffs could provide $2,000 checks to citizens, the $200 billion generated remains minor compared to a 2025 deficit of approximately $1.7 trillion and a national debt exceeding $38 trillion.