Tariff Burden Shifts as Foreign Exporters Cut Prices, NY Fed Says

Foreign exporters paid a growing share of the cost of new tariffs in 2025, though U.S. importers continued to pay for most of that cost, the Federal Reserve Bank of New York said Thursday (Feb. 12).

The share paid by foreign exporters was 6% from January through August, 8% from September through October, and 14% in November, New York Fed economists Mary Amiti, Chris Flanagan and Sebastian Heise and Columbia University economics professor David E. Weinstein wrote in a Thursday blog post.

Conversely, the share of tariffs paid by U.S. importers during those periods was 94%, 92% and 86%, respectively, according to the post.

“In sum, U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025,” the authors wrote in the post.

The cost of the tariffs was determined by comparing the size of the tariff to the change in price of the imported goods. For example, in November, the tariff was 10% while the foreign export prices declined 1.4%, leaving U.S. importers paying 86% of the cost of the tariff, according to the post.

The authors also found that global supply chains shifted in response to the tariffs.

The share of U.S. imports held by China fell by five percent points in the first 11 months of 2025, dropping below 10%. The countries that gain the most market share during that period were Mexico and Vietnam, according to the post.

China currently faces the highest tariffs among the seven exporting countries or regions that account for most U.S. imports, per the post.

The PYMNTS Intelligence report “How Middle-Market Business Uncertainty Rewrote 2025” found that goods companies are working to offset tariff costs by leaning heavily into supply chain diversification, vendor renegotiation and pricing discipline. Services firms, which are less exposed to direct tariff impacts, are concentrating on operational efficiency and selective margin protection, according to the report.

“More than half of firms fell short of their 2025 performance goals, and margin pressure is most acute for those operating under high uncertainty,” the report said. “In response, many companies have adopted a defensive posture, shifting away from long-term growth in favor of immediate cost controls and operational adjustments.”