Deutsche Bank has stated that it’s not foreign exporters who bear the burden of President Trump’s tariffs; rather, it’s the American consumers who are impacted. This goes against the White House’s position that foreign exporters are responsible for covering the costs associated with these trade taxes.
The analysts at Deutsche Bank recently delved into import prices for goods that were subjected to tariffs during the second quarter. They suggested that a deeper look into these price changes could illuminate who is really footing the bill.
If foreign exporters were truly absorbing the costs of tariffs, the bank argues, there would likely be a noticeable drop in imported goods prices. Instead, the data indicates only marginal price decreases, primarily from Canada and, to some extent, the UK.
In China, where tariff rates have surged by more than 30%, import prices only fell by around 1%. While Deutsche Bank acknowledged there are specific industries feeling greater impacts, they emphasized that, overall, it seems clear that American consumers are the ones paying the tariffs.
As prices for consumers have remained relatively stable, analysts suggest that US importers are likely absorbing the costs, which could lead to tighter profit margins instead of passing the expenses onto shoppers.
Deutsche Bank made three main points: first, foreign exporters haven’t yet felt significant impacts from these tariffs. Secondly, there may be more pressure on US consumer prices looming ahead. Lastly, this adds a negative factor to the overall economic outlook, as costs are rising more sharply in the US.
In response, White House spokesman Kush Desai criticized the Deutsche Bank findings, asserting that, in fact, prices for imported goods have decreased this year despite the tariffs. He maintained that the administration has consistently held that the financial burden of tariffs rests mostly with foreign exporters looking to access the massive US market.
Despite the apparent revenue from tariffs, amounting to $64 billion since the introduction of these “liberation day” tariffs—which include a blanket 10% duty on most imports—domestic manufacturers have reported significant losses. For instance, General Motors announced a $1.1 billion loss attributed to Trump’s trade policy, while Stellantis reported a $350 million loss.
Other multinational corporations, like Texas Instruments and Best Buy, have acknowledged the negative effects of tariffs on their profit margins due to their heavy reliance on commodities like steel and semiconductors.
Moreover, recent inflation figures have shown an uptick, signaling that consumers may be starting to feel the pinch from these tariffs. According to the Bureau of Labor Statistics, inflation rose 2.7% year-on-year in June, a slight increase from 2.4% in May, with the largest monthly gain since January.
