For now, it appears that consumers are absorbing less of the cost of tariffs than economists expected.
Since the Trump administration started imposing steep tariffs on goods from the rest of the world, the Treasury Department has been taking in about $30 billion a month in customs duties. On paper, American companies pay those bills when their products enter the country.
But figuring who ultimately absorbs the costs is more complicated. Inflation data, which will be updated on Friday after being delayed by the government shutdown, has thus far shown limited effects for consumers. Corporate earnings calls in recent weeks suggest that is changing.
Companies had passed along about 37 percent of new tariffs to consumers, forced 9 percent onto their suppliers and absorbed 51 percent through August, according to Goldman Sachs. That is a big hit to shoppers’ wallets, enough to reverse inflation’s fall. But it’s milder than it would have been if companies were charging as much to consumers as they had at the same point in the last burst of tariffs during President Trump’s first term.
Mostly that’s because the tariffs are much higher and more widespread than in 2018, making them too difficult for consumers to digest
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