Trump’s tariffs hurt the US much more than China – Economist Michael Hudson explains – Geopolitical
Despite what former President Donald Trump claims, it’s not foreign countries footing the bill for his tariffs—it’s everyday Americans and U.S. companies, according to leading economists and new data.
General Motors recently revealed it lost over $1 billion in profits because of these tariffs. Instead of hiking car prices, GM absorbed the cost. But that’s not the case across the board—prices for other imported goods like toys and appliances have noticeably gone up, meaning consumers are indirectly paying more.
So, who’s shouldering the burden?
George Saravelos from Deutsche Bank put it plainly: “Americans are mostly paying for the tariffs.” He warned that we could see even more pressure on prices down the line.
Wells Fargo economists echoed this, saying U.S. companies are now starting to pass these costs on to consumers after trying to absorb them quietly. Import prices—excluding fuel—jumped in June, showing that foreign companies aren’t lowering their prices to ease the strain on U.S. businesses.
Even though Trump recently said the Philippines will “pay a 19% tariff,” the reality is very different. The money collected from these tariffs is coming from within the U.S., not overseas.
Some global companies are adjusting…
Japanese carmakers, for example, have actually lowered their prices to the U.S. for three months in a row. But that’s more the exception than the rule.
Because the U.S. dollar has weakened, many international suppliers are raising prices to cover their losses. So, while some foreign firms are taking a small hit, the heavier impact still falls on U.S. businesses and shoppers.
Companies are adapting—but at a cost
Brands like Nike and 3M are making strategic changes. Nike plans small, targeted price hikes, and 3M has adjusted its production and pricing to limit damage. Still, many economists believe these cost pressures will start showing up in corporate earnings reports.
As Andrew Hollenhorst from Citigroup puts it, “If consumers and foreign firms are not bearing tariff costs, domestic firms are. That eventually shows up in company profits.”
So while tariffs were meant to pressure foreign governments, the real cost is landing squarely on American shoulders.
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