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US businesses and consumers paid nearly 90 per cent of the cost of Donald Trump’s tariffs last year, according to new Federal Reserve research that undercuts the president’s claim that foreign companies would bear the burden.

The study by the New York Fed found that the majority of tariff costs were passed through to Americans in the first 11 months of 2025, although exporters shouldered an increasing amount as the year progressed.

“Our results show that the bulk of the tariff incidence continues to fall on US firms and consumers,” the study’s authors wrote in a blog post on Thursday.

“[They] continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.”

The Trump administration has insisted that the sweeping tariffs imposed on trading partners during the president’s second term will be paid for by companies looking to export goods into the US.

“BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA,” Trump posted on Truth Social in August 2025, shortly before his so-called “reciprocal tariffs” took effect. 

However, others in the administration, such as US Treasury secretary Scott Bessent, have acknowledged that US retailers, such as Walmart, have been affected by the decision to raise the levies to levels last seen in the opening decades of the 20th century. 

The New York Fed study suggested that in the first eight months of the year, 94 per cent of the cost had been passed through. This fell slightly to 92 per cent in the September to October period and 86 per cent in November.

“The tariff pass-through into import prices has declined in the latter part of the year. That is, a larger share of the tariff incidence was borne by foreign exporters by the end of the year,” the authors wrote.

Other recent studies have made similar findings about the hit to Americans from tariffs. A report by Germany’s Kiel Institute last month found a tariff pass-through rate of 96 per cent, while a January study by the National Bureau of Economic Research put the figure at 94 per cent.

A paper last week from the non-partisan Tax Foundation think-tank found that the tariffs amounted to an average tax increase on US households of $1,000 in 2025 and $1,300 in 2026.

However, the impact on inflation has been more muted than many economists had feared. The consumer price index fell from 3 per cent in January 2025 to 2.7 per cent in December. Economists expect it to drop again on Friday, when official figures for January 2026 are released.

Over the course of 2025, the average tariff rate on US imports rose from 2.6 per cent to 13 per cent, according to the New York Fed study.