Donald Trump Claims Foreign Entities Pay Tariff Costs

President Donald Trump claims that foreign governments and companies are absorbing the costs of his administration's tariffs and asserts that these measures have not caused inflation. He maintains that tariffs have resulted in massive amounts of cash flowing into the U.S. Treasury without burdening American consumers.

Economic research from Goldman Sachs and Harvard Business School contradicts these claims, indicating that American businesses and consumers are bearing the burden. Analysts describe a phenomenon called sneakflation, where retailers implement small, gradual price increases to avoid detection. Goldman Sachs estimates that the share of tariff costs absorbed by consumers will rise from 22% in June to 67% by October, potentially reaching 100% when including spillover effects from domestic producers.

While falling gas prices have helped keep overall inflation tame, costs for imported tools, toys, and household furnishings have risen. Walmart CEO Doug McMillon confirmed that the retailer's costs have increased weekly due to tariffs, though the company intends to limit price hikes for as long as possible. Additionally, the Federal Reserve Bank of Atlanta found that businesses expect to raise prices this year due to ongoing tariff pressures.