“While tariffs are reshaping the geography of trade relations with the United States, their costs are falling mostly on domestic importers and consumers,” the ECB wrote in its Economic Bulletin, published Monday (March 30). “We find that costs associated with higher tariffs are passed down the pricing chain, with consumers currently bearing around a third of the tariff burden.”
The ECB added that if higher tariffs are expected to stick around for a longer period, evidence from American companies indicates they will pass a larger share of the cost of these duties onto consumers. Over the long term, this could rise to more than half as companies lose their ability to absorb costs.
“Additionally, if the extent to which exporters absorb tariffs remains limited in scope, as reported above, this implies that U.S. firms would absorb around 40% of higher tariff costs in the longer term,” the ECB wrote.
The findings come amid a period of high financial stress for U.S. consumers, which—as covered here Monday—is causing Americans to not only seek out lower prices, but to change the way “they organize purchases, where they shop and which payment tools they trust most when money feels tight.”
In terms of shopping, research by PYMNTS Intelligence show that consumers facing high financial stress are more than twice as likely as lower-stress consumers to use digital wallets for their last grocery purchase, at 21% versus 8%, and for their most recent retail purchase, at 28% versus 11%.
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“The shift also carries a more constructive signal for merchants and payments players,” PYMNTS added. “Consumers are still spending. They are just doing it more carefully.”
High-stress shoppers spent $109 on average on their last grocery trip and $111 on their last retail purchase, versus $95 and $88 for low-stress consumers. The research suggests these households could be consolidating purchases, planning more deliberately and using digital channels to get a better handle on costs, cut back on trips and capture promotions.
On the business side of things, additional PYMNTS Intelligence research shows that exposure to international suppliers and the volatility of tariffs has become a “dividing line in business performance,” as covered here earlier this month.
“Companies with significant global sourcing report higher uncertainty, weaker margins and more pronounced operational strain,” PYMNTS wrote. “Six in 10 CFOs at those firms say the regulatory environment lacks predictability, compared with just 15% among firms that rely more heavily on domestic suppliers.”
