MW Goldman Sachs says tariff burden to shift from businesses to consumers

By Steve Goldstein

Through June, U.S. businesses absorbed about two-thirds of the increased costs resulting from tariffs

The cost of tariffs has so far been borne by U.S. companies, but in a few months that burden will be on U.S. consumers, a bank says.

A new Goldman Sachs analysis finds that U.S. consumers have absorbed only a small portion of the tariffs imposed by the Trump administration - but the bank expects that to change in the months ahead.

Economists led by Elsie Peng compared the deviation of consumer prices for tariffed products from their previous trends.

Through June, they found that U.S. businesses absorbed 64% of the costs. Consumers took on 22% of the tariffs, while foreign exporters, by lowering their export prices, absorbed 14%.

But Peng expects those numbers to change markedly, because Chinese goods, including cars, were hit with tariffs first, before the broader application of so-called reciprocal tariffs imposed on multiple countries. By October, she assesses that U.S. consumers will be on the hook for two-thirds of the cost increases, compared with 25% for foreign businesses and 8% for U.S. companies.

The question of who will pay for the tariff increases is a politically charged one. The Trump administration has pointed out that, in the months following the tariff increases, consumer-price growth has so far been restrained.

The Goldman team, however, expects those dynamics to change.

Household appliances and information-processing equipment have already experienced sizable price increases relative to their previous trends.

Peng also noted that some domestic producers shielded from import competition have raised their own prices and benefited from those increases.

The bank is projecting core PCE prices to rise at a 3.2% year-over-year rate in December, which is above the central bank's 2% target. The rate was 2.8% in May and in June.

-Steve Goldstein

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August 11, 2025 09:34 ET (13:34 GMT)

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