By Jeanne Whalen and Sarah Nassauer

The U.S. has collected an additional $55 billion in tariffs this year. Corporate America has largely shouldered the bill.

President Trump's new levies, which have pushed the country's tariffs to their highest levels in decades, are typically paid by importers when goods reach U.S. ports. So there is little mystery about who makes that first payment. It is often a manufacturer, a logistics or customs broker, or in some cases a retailer itself that ordered the shipment.

But economists and others have been watching for signs of who will ultimately bear the cost. Would it be foreign suppliers, by cutting prices on the front end, or consumers, by paying higher prices at the checkout stand? Or would the U.S. businesses that sit in between shoulder the burden?

It is becoming increasingly clear that U.S. businesses, from General Motors and Nike to the local florist, are absorbing much of the costs for now. In a competitive market, a company that hikes prices could lose market share to a rival that keeps its prices steady. So many are reluctant to raise prices until they absolutely must, and until they know the ever-changing tariffs are sticking around. In some cases companies have said they plan to raise prices in the months to come.

Some stability could be on the horizon. This week, the U.S. struck a deal with Japan for 15% tariffs on imported goods, and a possible deal with the European Union for 15% on its goods is in the works.

That would offer some much-needed clarity, but could also trigger broader price increases on thousands of imports.

There are signs that some foreign suppliers, particularly of Chinese goods now carrying an extra 30% tariff, have trimmed some prices to help out. That support isn't anywhere near the levels Trump promised when he said foreign countries would be footing the bill.

Inflation has begun to tick up for some tariffed goods, including furniture, toys and clothes. So far those increases have been relatively mild. The June inflation reading moved to 2.7% from a year earlier, versus a 2.4% increase in May. The increase has been slower than expected partly because many companies pulled back on buying or stocked up on inventory before tariffs took effect, and partly because companies are choosing to absorb the hit for now.

"U.S. firms are still footing most of the tariff bill, having yet to pass more than a fraction of the tariff cost on to consumers," said Preston Caldwell, chief U.S. economist at Morningstar.

Signs of the profit hit are appearing in earnings reports.

General Motors said this week it paid more than $1 billion in tariffs on automotive imports in the second quarter. The company hasn't implemented wide-scale price increases in response to tariffs but hasn't ruled out price hikes, Chief Executive Officer Mary Barra said Tuesday. Stellantis, the Netherlands-based parent of the U.S. brands Ram and Jeep, this week said tariffs on automotive imports cut $350 million from its bottom line.

Tariffs clipped the profit of RTX, the aerospace and defense company said. The toy maker Hasbro said Wednesday that the financial impact of tariffs was less than expected in the most recent quarter, but that some of the effects could still be coming. Tariffs will likely create a $60 million expense for the full fiscal year, the company said.

Toy prices are likely to go higher later this year, Hasbro Chief Executive Chris Cocks said. "Usually it takes five to eight months for a toy to go from the factory to the shelf," he said. For now some retailers are delaying their purchases, and Hasbro is compensating for higher tariff costs through cost cuts, working with new suppliers, introducing new products and increasing prices, he said.

Last month, Nike executives said tariffs would trim the company's profit by around $1 billion this fiscal year, with most of the hit in the first half, before their mitigation efforts can take effect. "Surgical" product price increase will flow to shelves later this year, said Matthew Friend, Nike's chief financial officer.

Economists estimate the effective average tariff rate on all imported goods is now nearing 17%, up from 2.3% last year.

The import price index, which tracks what importers pay for many foreign-produced goods before tariffs are levied, has held steady in recent months, in what some economists call a sign foreign suppliers aren't broadly slashing their prices to offset costs for their U.S. customers.

Goldman Sachs conducted what it called a more granular analysis of import prices and concluded that foreign companies, particularly those in China, appear to be absorbing around 20% of tariff costs through price cuts.

Broader hits to consumers could be on the way. In May, Walmart said that it had started raising some product prices to offset the cost of tariffs and that more price increases would come this summer. For example, in May, Walmart executives said tariffs on goods from South and Central America had lifted the price of bananas, one of the most frequently purchased items at Walmart, to 54 cents a pound, from 50 cents.

Unlike smaller companies, Walmart can use its buying power and global supply chain to offer prices that are lower than many competitors. Walmart's largest suppliers are China, Mexico, Canada, Vietnam and India, according to executives.

"We'll continue to be price leaders," Walmart Chief Financial Officer John David Rainey said in June when asked about tariffs at an investor conference. For higher-priced items such as imported barbeque pits, Walmart has purchased less inventory to offset an expected slowdown in sales because of tariff-related price increases, he said.

Many large companies have been hesitant to link price increases directly to tariffs lest they draw Trump's ire. Days after Walmart said some prices would rise in May, Trump posted online that Walmart and China should "eat the tariffs," not raise prices. When several other large retailers reported earnings the following week, including Home Depot and Target, they emphasized their efforts to resist price increases.

Shayai Lucero, a florist near Albuquerque, N.M., is swallowing some of the extra cost of tariffs, while also raising prices. The imported long-stem roses from South America she buys from U.S. wholesalers used to cost $1.15 to $1.35 each but are now running $1.95 to $2.15 a piece. That has forced her to raise her price for a vase of a dozen roses to $69 from $60, she said.

The floral wreaths and foam she imports from China have also climbed in price since Trump added 30% tariffs on those imports. A heart-shaped wreath from China that used to cost $24 recently jumped to $38. That and higher flower prices cut the profit on an arrangement she recently made for a funeral to $6 from $30, she said.

She worries that higher prices could lead to lost business. "It's that real fine line of do I lose customers or do I stay in business?" she said. To cut costs she is eliminating some expensive wreaths from her lineup, including ones in the shape of the words Mom and Dad, and is asking community members to donate vases to her business.

Some footwear companies have announced plans to increase prices in the coming weeks, said Matt Priest, CEO of the Footwear Distributors and Retailers of America, a trade association.

"A lot of the impact has so far been absorbed by the brand and the retailer, but they can only hold on for so long," Priest said of his member companies. About 99% of shoes sold in the U.S. are imported from China, Vietnam, Italy and other countries.

Write to Jeanne Whalen at Jeanne.Whalen@wsj.com and Sarah Nassauer at Sarah.Nassauer@wsj.com

(END) Dow Jones Newswires

July 24, 2025 23:30 ET (03:30 GMT)

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