As Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein wrote, "A tariff is a tax on something crossing a border, but the border is only where the bill shows up first." The real question is who ends up paying it.
By November, American companies and families had absorbed roughly nine-tenths of the tariff expense.
That matches the earlier 2018-2019 tariffs, when the researchers behind the 2025 estimates found 100% pass-through, meaning foreign exporters did not cut prices to absorb the tax.
Imagine a product that costs $100 before it reaches the U.S. border.
A 25% tariff adds $25 in duty, so the all-in price is $125.
If the foreign company keeps its price at $100, the U.S. importer pays the whole $25. Economists call that 100% pass-through, because the tariff passes straight through to the final price.
If the exporter drops its price to $80, the duty falls to $20 and the importer's total stays at $100. That is the other extreme, where the foreign seller eats the whole tax.
Get the free Always Be Buying eBook and learn the simple system for building wealth on any income
Most real cases sit somewhere between. If the exporter cuts its price to $96, the duty is $24 and the all-in price is $120, which leaves the exporter $4 worse off and the U.S. importer $20 worse off. The burden splits 17% on the exporter and 83% on the importer.
The 2025 estimates compare prices with the same month a year earlier, from January 2024 through November 2025, using monthly product-level data that goes back to January 2023.
Early in the year, the split was heavily lopsided: from January through August, U.S. importers bore 94% of the burden and foreign exporters just 6%. On average, a 10% tariff was linked to only a 0.6 percentage point drop in foreign export prices.
The split shifted only slightly later in the year. It was 92% for U.S. importers and 8% for foreign exporters in September and October, then 86% and 14% in November.
A 10 percentage point tariff hike in November coincided with a 1.4% fall in foreign export prices. At the average December tariff of 13%, 13 times 0.86 gives an 11% price premium on tariffed goods compared with untaxed ones.
Official tariff rates are not necessarily what importers end up paying. Canada faces a 35% U.S. tariff, but 83% of Canadian imports enter duty-free under USMCA, which keeps the average duty paid below the official rate.
That gap between official and paid rates widened sharply in April and May. Duties on Chinese products jumped by 125 percentage points in April and May.
Importers steered around those goods to avoid the higher duties. A mid-May rollback cut 115 percentage points from that increase.
Look back at 2017, and the trade map looks very different. Seven exporters supplied roughly 80% of U.S. imports at that point, and China alone supplied nearly 25%.
After a 9 percentage point tariff increase on Chinese goods in 2018-2019, China's share of U.S. imports fell to around 15% by 2024. The import-share figures cover non-oil goods, with 2025 data covering January through November.
China now faces the highest tariff rate among the countries and regions shown.
Higher import prices move into the cost of products on shelves and into the budgets of companies that rely on imported parts. That is how a trade policy that importers mostly pay for becomes a story about everyday prices.
For your portfolio, the interesting question is not whether tariffs are good or bad. It is which companies can swallow the cost and which ones have to pass it along.
Companies with pricing power have more room to protect their margins. Companies that depend on imported inputs have less room, and for your portfolio, that difference is where the next round of winners and losers shows up.
Download the free Always Be Buying eBook and start putting your money to work today