A new study by the Kiel Institute for the World Economy has found that American consumers and businesses pay nearly all the cost of U.S. tariffs on imports, including Indian goods, rather than exporters.
The research analyzed over 25 million U.S.-bound shipments between January 2024 and November 2025 and revealed that about 96% of tariff costs are borne by U.S. buyers, with exporters absorbing only a small fraction.
In India’s case, exporters largely maintained their U.S. prices, reducing shipment volumes instead. As a result, tariffs acted like a hidden tax on American consumers, boosting U.S. customs revenue but raising costs for households and businesses.
Economists say the findings challenge claims that tariffs are paid by foreign producers and highlight the inflationary pressures such duties can create within the U.S. economy.
The study also underscores broader debates over the effectiveness of tariffs as a tool to protect domestic industries or influence trade negotiations.