ECB study: US consumers bear most tariff costs

US consumers and domestic importers are shouldering most of the financial burden from recent tariffs, while import volumes drop and foreign sellers face weaker demand, according to a new European Central Bank analysis published Monday.

The ECB’s article in its Economic Bulletin, reported by Reuters, finds exporters to the United States pass on only a small share of tariff costs—undercutting claims that foreign sellers would pay most of the bill after Washington imposed new duties on key trading partners last year.

Consumers and importers take the hit

Exporters to the United States absorb only a “small fraction” of higher tariff costs, the ECB study says, with most of the burden falling on domestic importers and end‑consumers.

The findings suggest that tariff impacts are concentrated within the US market, rather than abroad.

The paper estimates that US consumers currently bear about one‑third of total tariff costs, a share that could climb above half over time as companies exhaust their ability to absorb higher expenses. US firms, meanwhile, may ultimately take on around 40% of the longer‑term burden.

Import volumes decline as duties rise

While the immediate hit lands on US buyers, overseas exporters are also suffering from weaker demand.

The ECB estimates that a 10% increase in duties reduces import volumes by roughly 4.3%, highlighting the price sensitivity of cross‑border trade.

The analysis adds that even when goods remain traded under tariff regimes, higher costs still erode volumes—tightening margins for sellers and straining supply chains already under pressure.

Broader policy implications

The findings challenge earlier claims that US tariffs would primarily penalise foreign producers. Instead, the ECB concludes that in the near term, American consumers and importing firms absorb most of the cost, while over time the burden shifts as pricing power adjusts.

For policymakers and investors, the evidence reinforces that tariffs act largely as a domestic tax—curbing import demand and rippling through global supply networks.

Even modest rate increases can meaningfully slow trade and push costs higher for households and companies alike.