Study Finds Trump’s Tariffs Cost U.S. Consumers More Than Government Gains

A new economic study concludes that American consumers bore the brunt of tariffs imposed under President Donald Trump, paying more in higher prices than the federal government collected in revenue. The National Bureau of Economic Research (NBER) paper, authored by researchers from Duke University, the University of Chicago, and the Federal Reserve, analyzed product-level data from a major U.S. wine importer during the 2019–2021 European wine tariffs.

The study found that while foreign producers slightly lowered prices to offset the 25% tariffs, domestic distributors and retailers expanded their markups—raising retail prices nearly 7% on average. For every $1.19 in tariff revenue per bottle, U.S. consumers paid about $1.59 more, meaning buyers lost more than the government gained.

Researchers said the tariffs encouraged “engineering” to avoid duties, such as altering alcohol content or introducing new untaxed products. Trump has long claimed tariffs are “a tax on foreign countries,” but economists and trade data consistently show the burden falls largely on U.S. consumers.

The findings reinforce earlier Federal Reserve and Tax Foundation reports showing that tariffs during Trump’s first term increased overall retail prices by roughly 5% and reduced household purchasing power.

Sources:

• Reason – MBFC Rating

• NBER – Unrated

• Reuters – MBFC Rating

• Tax Foundation – MBFC Rating