Trump’s tariff policy has backfired; claims were made to burden foreign companies…US citizens are suffering.

Washington: A new report has raised a big question on the much-discussed tariff policy of American President Donald Trump. It was claimed that the burden of import duty would fall on foreign companies and governments, but the latest study has revealed that about 90 percent of the cost of these duties was borne by American consumers and businesses. This conclusion has emerged from the analysis of economists associated with the Federal Reserve Bank of New York.

USA Today reported that according to a report released on February 6 by a renowned tax foundation, it is estimated that every American family will face an additional burden of $1,000 in 2025, while this burden is expected to increase to $1,300 in 2026.

According to the report, most of the tariffs imposed on imported goods were absorbed into the US market in the form of price increases. Foreign exporters made limited price reductions, passing the cost burden on to domestic companies and consumers. This study not only questions Trump’s “America First” trade policy but also indicates that the real impact of protectionist measures often falls on the domestic economy.

The report states that during the Trump administration ,
heavy tariffs were imposed on products imported from several countries, including China. Trump claimed that these tariffs would be paid by foreign companies and governments. However, the study’s findings show that the reality was different. According to the analysis, most of the tariffs imposed on imported goods were paid by American importers, which subsequently burdened consumers and businesses in the form of increased prices. This means that the tariffs acted like a domestic tax, impacting the prices of everyday goods.

Foreign exporters did not reduce prices.
The report also stated that foreign exporters reduced the prices of their products very little. This means that they were able to pass on the burden of tariffs to American buyers rather than bear them themselves. As a result, imported goods became more expensive and costs for American companies increased.

Impact on Inflation
The study also indicated that tariffs had an impact on inflation. When companies’ costs rise, they raise the prices of their products and services, leading to widespread price increases. Economists say that tariffs are often presented as a measure to reduce trade deficits or protect domestic industries, but if the burden falls primarily on the domestic economy, the benefits of the policy may be limited.

The Way Forward
Experts believe that assessing the macroeconomic impacts of trade policy is essential when formulating it. If the bulk of the burden of tariffs falls on the domestic economy, this could negatively impact consumer spending, investment, and competitiveness. The report makes it clear that, given the complexities of global trade, any protectionist measure taken by any country can ultimately impact its own market. Therefore, future trade policies need to be formulated with a balanced and long-term perspective.