Who Really Pays U.S. Tariffs? The Hidden Tax on Americans

By EV World Si | July 31, 2025

Tariffs Are Paid at the Border

According to a BBC analysis, U.S. tariffs are **not paid by foreign exporters** as often claimed. They are collected from **American importers** when goods enter the country. These companies typically pass higher costs along to retailers and, ultimately, to U.S. consumers.

Price Increases for Everyday Goods

As companies run through stockpiled inventory and absorbable costs, **prices have risen** on appliances, electronics, sports equipment, books, and toys. Tariffs function as a **hidden tax**, landing on American households through higher retail prices.

Why Economists Call Tariffs a “Hidden Tax”

• Tariffs are **collected from U.S. importers**, not foreign companies.
• Importers **embed the costs in product prices**, so consumers pay indirectly.
• Unlike a sales tax or income tax, tariffs are **invisible on receipts**, making the burden less obvious but economically real.
• Analyses from the **CBO, Brookings, and Peterson Institute** echo this framing, calling tariffs a **domestic tax in disguise**.

Revenue and Economic Impact

• Average U.S. tariff rates surged to **18.2% in 2025**, the highest since 1934, up from **2.4% in 2024**.
• Tariff revenue reached **$28 billion in June 2025**, triple the monthly total of 2024.
• The Congressional Budget Office projects **$2.5 trillion in reduced government borrowing** over 10 years, but warns the economy will be **smaller than without tariffs**.

A Hidden Tax on Americans

Though politically framed as penalties on foreign producers, tariffs work as a **tax on domestic consumers**. They raise prices, generate federal revenue, and slow economic activity—while most Americans never see the tax line on a receipt.

Source

• BBC News: How much cash is the US raising from tariffs?

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