Importers, exporters or consumers: who pays the customs duties?

The issue remains divisive. The Trump administration has always insisted that exporters will pay. The Fed, which is cautious as ever, prefers to wait before moving too quickly and is monitoring inflation trends. We now know a little more.

However, the stockmarkets have decided to be optimistic. The announcement of future trade agreements with the US propelled the S&P 500, the UK's FTSE 100, Japan's TOPIX and the MSCI All Country to new records this week.

As of December 31, 2024, the average tariff rate in the US stood at 2.5%. Even if maintained between 15% and 20%, it remains at least six times higher than before. Investors want to believe that the economy will resist. However, behind this optimism, one thing remains clear: someone has to pay.

Who is paying?

According to Deutsche Bank, the US government has already collected $100bn in tariff revenue so far this year. So yes, someone is paying. US consumers? Importers? Or foreign exporters?

For now, US households seem to have been spared: the consumer price index remains subdued.

Monthly US inflation (Bureau of Labor Statistics)

Perhaps exporters, then? Not really. Deutsche Bank analyzed import prices for US manufactured goods in the second quarter. In theory, foreign suppliers could have reduced their margins to absorb some of the cost. However, in practice, the declines were marginal, with only Canada standing out. For Chinese products, hit by 30% tariffs, import prices fell by only 1%. Foreign companies suffered from uncertainty, but not from a real tariff shock.

Provisional conclusion: US importers are paying the price. They are cutting their margins rather than immediately raising prices. However, this cannot continue indefinitely. Stocks can cushion the shock for a few months, but no longer.

Goldman Sachs analysts are betting on a different scenario: eventually, the burden will mainly fall on US consumers.

Estimated distribution of the cost of tariffs between consumers, US companies and exporters

This interpretation directly contradicts the Trump administration, which insists that foreign exporters will bear the cost.

This is bad news for the dollar and a headache for the Fed. Tariffs create a supply shock: inflation and employment are likely to move in opposite directions. This is obviously not a scenario favored by central bankers. The central bank will have to choose between containing a new surge in inflation and preserving jobs.