{"id":8972,"date":"2026-02-17T14:00:39","date_gmt":"2026-02-17T19:00:39","guid":{"rendered":"https:\/\/distributionstrategy.com\/?p=8972"},"modified":"2026-09-11T10:45:17","modified_gmt":"2026-09-11T14:45:17","slug":"new-york-fed-most-of-2025-tariff-costs-fell-on-u-s-importers","status":"publish","type":"post","link":"https:\/\/distributionstrategy.com\/2026\/02\/new-york-fed-most-of-2025-tariff-costs-fell-on-u-s-importers\/","title":{"rendered":"New York Fed: Most of 2025 Tariff Costs Fell on U.S. Importers"},"content":{"rendered":"

The average tariff rate on U.S. imports rose fivefold in 2025, and U.S. firms and consumers bore all the cost, according to new research published Feb. 12 by the Federal Reserve Bank of New York.<\/p>\n

In an analysis of import data through November 2025, economists found that 90% of the economic burden of last year\u2019s tariffs fell on U.S. importers rather than foreign exporters. The findings suggest that tariffs functioned as a tax on domestic businesses and consumers, with limited price concessions from overseas suppliers.<\/p>\n

The research, published on the New York Fed\u2019s Liberty Street Economics blog, was authored by Mary Amiti, Christopher Flanagan, Sebastian Heise and David E. Weinstein.<\/p>\n

Using U.S. Census Bureau foreign trade statistics and U.S. International Trade Commission tariff schedules, the authors tracked monthly changes in statutory tariff rates and duties collected.<\/p>\n

The weighted average statutory tariff rate stood at 2.6% at the start of 2025. It surged in April and May after tariffs on Chinese goods were raised by 125 percentage points, before being partially rolled back by 115 percentage points in mid-May. By December, the weighted average tariff rate had climbed to 13%.<\/p>\n

The effective duty rate \u2014 calculated as duties collected divided by total import value \u2014 remained lower than the statutory rate because of exemptions and sourcing shifts. For example, although the United States maintains a 35% tariff on certain Canadian imports, 83% of those imports are exempt under the U.S.-Mexico-Canada Agreement.<\/p>\n

The gap between statutory and effective rates widened sharply during the spring spike as importers shifted away from higher-tariff Chinese goods.<\/p>\n

China\u2019s Import Share Drops Below 10%<\/strong><\/h2>\n

The data show significant reconfiguration of U.S. supply chains.<\/p>\n

China accounted for 25% of U.S. non-oil imports in 2017. After tariff increases in 2018 and 2019, China\u2019s share fell to about 15% by 2024. In the first 11 months of 2025, China\u2019s share dropped another five percentage points, slipping below 10%.<\/p>\n

Mexico and Vietnam gained the most market share during that period.<\/p>\n

China now faces the highest tariffs among major U.S. trading partners included in the study, the authors said.<\/p>\n

The central focus of the report is tariff incidence \u2014 how the cost of a tariff is divided between foreign exporters and domestic importers.<\/p>\n

Although importers pay duties at the border, foreign suppliers could theoretically offset some of the cost by cutting export prices. If they do not, tariffs translate directly into higher import prices.<\/p>\n

To measure this, the researchers examined 12-month changes in foreign export prices relative to changes in tariffs at the 10-digit Harmonized Tariff Schedule-country level from January 2023 through November 2025.<\/p>\n

Their results show high pass-through of tariffs into U.S. import prices:<\/p>\n