Saudi Press

Saudi Arabia and the world
Thursday, Oct 02, 2025

Americans, not Chinese, paying for Donald Trump’s tariffs, study by New York Fed shows

Americans, not Chinese, paying for Donald Trump’s tariffs, study by New York Fed shows

Prices charged by Chinese firms have barely budged, suggesting US companies and consumers are absorbing about US$40 billion in annual costs. However, China’s share of US imports of machinery, electrical equipment and electronics has fallen

When the Trump administration imposed tariffs on Chinese imports last year, officials insisted that China would pay the cost – implying that Chinese firms would have to cut their prices to absorb import “taxes” of up to 25 per cent when the goods hit US shores.

Instead, the prices Chinese firms charge have barely budged, meaning US companies and consumers are paying the tariff costs, estimated at around US$40 billion annually, New York Fed Reserve Bank researchers found in a study released on Monday.

As a result of the US-China trade war, US Customs and Border Protection adds as much as 25 per cent to the import price as Chinese goods enter the country. If Chinese companies were absorbing that cost, they would have to cut their prices as much as 20 per cent – a level that would allow US retailers, manufacturers, or wholesalers to keep their own prices and profits stable.

That is not what is happening.



Import data from June 2018 to September 2019 shows Chinese import prices fell only 2 per cent, the Fed study found, in line with price declines seen in many other nations as global trade slowed.

“The continued stability of import prices for goods from China means US firms and consumers have to pay the tariff,” the Fed research team wrote.

The researchers did not estimate how those costs were split between lower profits for US companies or higher consumer prices.
The research did find, however, that China is feeling the impact of higher tariffs.

China’s share of US imports of machinery and electrical equipment has fallen by around two percentage points since 2017, and its share of US electronics imports has fallen by six percentage points.

That market share “has gone largely to Europe and Japan for machinery and to Malaysia, South Korea, Taiwan, and Vietnam for electronics and electrical equipment,” the study found. The research did not address how much market share may have been gained by US suppliers, or whether other countries are charging higher prices than Chinese firms.

The fact that dollar prices of Chinese goods have not fallen also means that the roughly 10 per cent drop in the value of China’s currency since the first tariffs were imposed has not been used by its exporters to keep a competitive edge, as some US officials contend.

Instead, the currency drop serves “to pad profits on each unit of sales” for Chinese exporters, the research team concluded.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
New Eye Drops Show Promise in Replacing Reading Glasses for Presbyopia
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
Top AI Researchers Are Heading Back to China as U.S. Struggles to Keep Pace
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Did the Houthis disrupt the internet in the Middle East? Submarine cables cut in the Red Sea
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
×