Ready for a quick breakdown of how new tariffs on furniture 🪑 and lumber 🌲 are impacting your wallet? A fresh analysis by Goldman Sachs shows American consumers are shouldering more than half of the costs imposed by U.S. President Donald Trump.
According to Goldman Sachs, shoppers will cover about 55% of these duties by year-end. U.S. businesses absorb 22%, foreign exporters kick in 18%, and roughly 5% of tariffs slip through without collection.
But there’s more: by the end of next year, consumers could be hit with up to 70% of the total cost as prices keep climbing.
“Most of the cost seems to be borne by U.S. firms,” notes Harvard professor Alberto Cavallo. “We’ve seen a gradual pass-through to consumer prices, and there’s clear upward pressure.”
So far, the tariffs have nudged the core PCE price level up by 0.2%. Goldman Sachs predicts another 0.16% bump in July and a 0.5% rise by December. If the underlying inflation trend stays at 2.4%, core PCE inflation could hit 3.2% by year-end.
Who’s really paying? Cavallo and his team tracked prices for 359,148 goods—from carpets to coffee ☕—and found imported items are 4% pricier since early March, while domestic products rose 2%.
Interestingly, sellers are absorbing part of the hit, but U.S. import prices show foreign exporters are also raising dollar prices to offset currency shifts. In short, they’re passing on most of the tariff burden too.
Bottom line: when you add that new sofa to your cart or brew your morning cup, remember—these tariffs aren’t just headlines; they’re in every price tag! 🛒
Reference(s):
U.S. consumers bearing brunt of Trump's new tariffs: analysis
cgtn.com
