American shoppers are starting to feel the effects of the U.S.’s latest wave of import tariffs, and economists warn the worst may be yet to come. Since returning to office, President Donald Trump has implemented sweeping trade measures, including a 10% baseline tariff on all foreign imports, additional targeted tariffs on specific countries, and product-specific duties on goods like automobiles.
So far, consumers have been largely shielded from the full brunt of these price increases. According to a new Goldman Sachs report, American households have absorbed just 22% of the costs tied to this year’s tariff hikes. But that’s expected to change quickly. If current pricing patterns persist, Goldman estimates that consumers’ share of the burden could jump to 67% by October, pushing up costs for everything from laptops and smartphones to cars and household appliances.
Businesses and Exporters Have Shouldered Most Costs For Now
Goldman’s analysis, based on import and consumer price data through June, shows that U.S. businesses have so far covered about 64% of the tariff costs. This often means companies are sacrificing profit margins to keep prices stable for customers a strategy that is rarely sustainable in the long term. Foreign exporters, meanwhile, have absorbed roughly 14% of the costs by lowering their own prices to remain competitive in the U.S. market.
The bank’s economists noted that heavily import-reliant goods categories have already seen meaningful price jumps compared to their pre-tariff trends. Prices for household appliances and information processing equipment including computers and electronics have climbed 7.5 percentage points higher than they would have without tariffs, according to Goldman’s estimates.
Inflation Impact Building Into Year-End
Tariffs have already added an estimated 0.20 percentage points to core Personal Consumption Expenditures (PCE) inflation the Federal Reserve’s preferred inflation measure — so far this year. Goldman expects an additional 0.16% increase in July, followed by another 0.5% between August and December. This would push core PCE inflation to about 3.2% year-over-year by December, well above the Fed’s 2% target. Without tariffs, Goldman believes the inflation trend would be closer to 2.4%.
This means the effects will be most visible during the back-to-school and holiday shopping seasons periods when consumer spending is at its peak. Several major companies, including Adidas and Walmart, have already confirmed they will raise U.S. prices in response to higher import costs, further squeezing household budgets.
Tariffs’ Revenue and Political Footprint
While tariffs are often framed as a way to protect domestic industries, they also serve as a significant revenue source for the federal government. Treasury Department data shows that customs duties have generated over $100 billion so far this year a clear indicator, as Deutsche Bank recently put it, that “someone is paying” for these trade policies.
For now, much of that “someone” has been corporations and exporters. But with their ability to absorb these costs diminishing, U.S. consumers are poised to face a more direct hit. If companies continue passing on more of the burden to shoppers, price hikes could accelerate, complicating the Federal Reserve’s efforts to bring inflation down without triggering a broader economic slowdown.
