US importers, not the foreign-based exporters who are shipping them goods from overseas, are shouldering the cost of President Trump’s tariffs — and higher prices for US shoppers are “in the pipeline,” according to Deutsche Bank.
In a research note, analysts at the German financial giant contradicted the White House’s assertions that foreign exporters abroad are on the hook for Trump’s trade taxes, which have reeled in more than $100 billion in tariff revenue so far this year
The White House disputed the analysts’ assertions on Wednesday.
The analysts examined US import prices for manufactured goods during the second quarter, when the tariffs were implemented. The bank said the behavior of import prices helps reveal who is actually paying the duties.
“If foreigners were paying for the tariffs, we would expect to see a sharp reduction in the price of imported goods as they absorbed it into their own margins,” the bank wrote.
Instead, the data show only “mild price reductions,” mainly from Canada and, to a lesser extent, the UK.
In China’s case, where average tariff rates rose more than 30%, dollar import prices dropped by just 1%, said the bank.
“To be sure, there are specific industry examples of a greater impact,” Deutsche Bank acknowledged.
“For now, however, the top-down macro evidence seems clear: Americans are mostly paying for the tariffs.”
Since consumer price gains have remained relatively contained, the analysts said it suggests US importers are absorbing the costs in the form of squeezed profit margins rather than passing them on to consumers.
Deutsche Bank drew three conclusions: first, exporters abroad “are not yet feeling much pain from the tariffs,” which could strengthen their bargaining power ahead of the Aug. 1 trade deadline.
Second, there may be “more pressure on US consumer prices in the pipeline.” Third, because the economic cost is falling more heavily on the US, the situation adds “an added dollar negative” to the broader macroeconomic outlook.
White House spokesman Kush Desai panned the Deutsche Bank analysis, pointing to a White House analysis that the administration says is proof that “prices of imported goods have actually fallen this year despite President Trump’s historic tariffs.”
“The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world’s biggest and best consumer market,” Desai told The Post.
Trump’s Council of Economic Advisers (CEA) found that imported goods prices have fallen this year and declined faster than overall goods prices since February — “contradict[ing] claims that tariffs or tariff‑fears would lead to an acceleration of inflation” — a pattern the CEA says holds across core goods, durables and nondurables.
From December 2024 through May 2025, overall PCE goods prices rose 0.4% (about a 1% annualized pace) while the imported component fell 0.1%, according to CEA data.
A similar breakdown of consumer price index data shows imported goods deflated 0.8% while aggregate CPI goods were flat. When services are stripped out, the CEA finds outright import‑goods deflation beginning in March.
CEA also noted that lower energy prices — more heavily weighted in the import basket — help explain the gap but that imported core goods still rose less than overall core.
The White House analysis concludes tariffs are “not a first‑order consideration for inflation” and have “not reduced the disinflationary impulse from imported goods” through May.
Last week, the Financial Times reported that the Trump administration raked in $64 billion in customs duties during the second quarter of this year which ended in late June.
The three-month period began when Trump rolled out his “Liberation Day” tariffs that included a universal 10% levy on imports from most nations in addition to higher duties on certain sectors such as steel and foreign cars.
Domestic automakers have indicated that tariffs are eating into their profits. General Motors, the Detroit-based producer of iconic brands such as Cadillac and Buick, told investors this week that Trump’s trade policies have cost the company $1.1 billion in the most recent quarter.
Stellantis, the Netherlands-based parent of US brands Ram and Jeep, said Monday that it lost $350 million as a result of Trump’s tariff policies.
Other multinationals such as Texas Instruments, ASM International, AMD and Best Buy — companies that are vulnerable to tariffs due to their reliance on key commodities such as steel, aluminum and semiconductors — have all cited tariffs as one of the reasons behind weakening demand and lower profits.
Meanwhile, the latest inflation figures indicate that consumers are starting to feel the pinch of tariffs.
The headline inflation figure rose 2.7% year over year in June, up from 2.4% in May, according to the latest data from the Bureau of Labor Statistics. Prices climbed month-over-month by 0.3% — the largest monthly gain since January after a 0.1% increase in May.
Headline inflation has now risen for a second straight month after a period of steady decline earlier this year.
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