February 19, 2026 1:32PM # The White House Still Can’t Grasp That Americans Pay US Tariffs By [Scott Lincicome](https://www.cato.org/people/scott-lincicome) and [Nathan Miller](https://www.cato.org/people/nathan-miller) --- SHARE Listen to this article Generated with [ ElevenLabs](https://elevenlabs.io/) AI technology. Loading the [Elevenlabs Text to Speech](https://elevenlabs.io/text-to-speech) AudioNative Player... ![tariffs](/sites/cato.org/files/styles/pubs_2x/public/2025-03/tariffs.jpg?itok=HF2f_Gqu) On the issue of who’s paying the president’s tariffs, the Trump administration has had a rough few weeks. Research keeps confirming what conventional economics has always predicted and what the administration has always denied: Americans pay America’s tariffs. Yet rather than reckon with this unsurprising-yet-inconvenient conclusion, White House officials have responded with misdirection, insults, and even a televised suggestion that some of the professional economists involved be *punished*. First up, White House Senior Counselor for Trade and Manufacturing Peter Navarro took to the *Wall Street Journal* to list—with a conspicuous lack of evidence—the various ways in which foreign exporters *might* absorb US tariffs, leaving American companies and consumers off the hook. Yet as Lincicome [pointed out in a new letter to the *Journal*](https://www.cato.org/commentary/letter-editor-who-pays-trumps-tariffs-americans-do), Navarro is correct that foreigners could *theoretically* bear tariffs’ economic burden by lowering the all-in price they’d accept from US customers. But *in reality* there’s little evidence of this having broadly occurred last year. Instead of declining, in fact, nonfuel import prices—which include discounts and rebates but not tariffs paid at the border—were slightly *up*: ![No evidence that foreign exporters are broadly absorbing US tariffs](https://datawrapper.dwcdn.net/XCstS/with-logo.png) With [effective tariff rates as high as 10 percent](https://budgetmodel.wharton.upenn.edu/issues/2026/2/3/effective-tariff-rates-and-revenues-updated-february-3-2026), we calculate that exporters would need to cut their prices roughly 8 percent to fully absorb these new taxes. Yet, as the chart above shows, nonfuel import prices haven’t budged from their pre-tariff trend, indicating that tariff costs have generally been borne by US-based companies and consumers, not foreigners. The burden rests squarely on Navarro and others to demonstrate otherwise—something they’ve utterly failed to do beyond a few meaningless anecdotes. More rigorous economic research confirms our conclusion. We now count at least *seven* independent studies since October 2025 that have examined the available data, and *all* have found that Americans are bearing most of the tariffs’ economic burden, including through higher retail prices. ![Research confirms Americans—not foreigners—are paying most US tariff costs](https://datawrapper.dwcdn.net/DiMTW/with-logo.png) [Navarro singled out two of these papers](https://www.wsj.com/opinion/foreign-countries-bear-the-burden-of-tariffs-86794b27?mod=letterstoeditor_article_pos12&mod=article_inline) for failing to account for the possibility of foreigners paying the tariffs, yet both already controlled for the very thing he quibbled with. Now, Navarro’s colleague, National Economic Council Director [Kevin Hassett, has escalated things even further](https://www.msn.com/en-us/money/markets/hassett-attacks-ny-fed-for-study-on-tariffs-hurting-us-companies/ar-AA1WAUjE?ocid=finance-verthp-feeds), calling one paper from economists at the Federal Reserve Bank of New York “the worst paper I’ve ever seen in the history of the Federal Reserve system” and saying the authors should be “disciplined” for their work. His main argument: The authors didn’t consider how import volumes might decline in response to tariffs, thus boosting US output (“maybe at a higher price”) and helping American workers at the factories making that stuff. Leaving aside Hassett’s troubling smear of these reputable economists for having the gall to do their jobs free of political spin, his claims are simply wrong. For starters, the New York Fed economists expressly *did* consider changes in import volumes—one of their exhibits is literally titled “China’s Share of U.S. Imports Has Fallen Markedly.” Their paper’s methodology was also sound, as it was based on their [peer-reviewed examination](https://www.aeaweb.org/articles?id=10.1257/jep.33.4.187) of US tariffs imposed in 2018–2019. For both tariff episodes, they found US companies and consumers absorbed the vast majority of the tariff burden—though a little less in 2025 (90 percent) than in 2018 (100 percent). Finally, Hassett’s quiet acknowledgment that US producers would charge a little more for goods now subject to tariffs supports new research (e.g., from Harvard Business School) showing that the retail prices of domestic items have also increased in price this year—another unsurprising result. In short, seven independent research teams have now examined the “who’s paying” question and have reached essentially the same answer: We are. The White House can attack the messengers, but it can’t change the data—and at this point, the data speaks for itself. ##### Related Tags [IEEPA Tariffs](https://www.cato.org/ieepa), [Trade Policy](https://www.cato.org/trade-policy), [Defending Globalization](https://www.cato.org/defending-globalization) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).