Economy

Goldman Sachs: How Trump’s Tariffs Are Hitting American Consumers Hard

Consumers to bear 55% of tariff costs, per Goldman Sachs. Supreme Court to review tariff authority.

October 13, 2025, 10:22 PM

The metallic silver logo for the Goldman Sachs financial firm is prominently displayed on the reflective blue glass exterior of its modern corporate building. By ioda / Shutterstock.com.

Executive Summary

American consumers are projected to bear 55 percent of the costs from President Trump’s tariffs this year, with U.S. businesses absorbing 22 percent and foreign exporters 18 percent, according to a Goldman Sachs analysis.

The Goldman Sachs report and recent consumer price data contradict the administration’s assertion that foreign nations pay the costs of tariffs, indicating a significant domestic impact.

The Supreme Court is scheduled to hear appeals in November concerning President Trump’s authority to impose widespread tariffs under the International Emergency Economic Powers Act of 1977.

The Story So Far

President Trump’s administration has implemented tariffs, asserting that foreign nations would bear the costs, a claim disputed by economic analyses, including a recent Goldman Sachs report, which project a significant financial burden on American consumers and businesses. This ongoing debate about who pays for tariffs is set against a backdrop of increasing economic impact and an upcoming Supreme Court review in November, which will critically assess the President’s authority to impose such widespread tariffs under the International Emergency Economic Powers Act of 1977.

Why This Matters

Goldman Sachs analysis indicates American consumers are projected to bear the majority of President Trump’s tariff costs, leading to potential increases in domestic prices despite the administration’s assurances that foreign entities would pay. This financial burden on consumers and businesses, alongside Trump’s threats of further levies, faces critical legal scrutiny from the Supreme Court, which will review the executive authority behind these tariff implementations and could significantly reshape future U.S. trade policy.

Who Thinks What?

Goldman Sachs economists project that American consumers will bear 55 percent of the costs stemming from President Trump’s tariffs, with U.S. businesses initially absorbing 22 percent before passing those costs to consumers.

President Trump and his administration (Treasury Secretary Scott Bessent, White House spokesperson Kush Desai) maintain that foreign nations and exporters will ultimately bear the costs of the tariffs, and that the policy encourages companies to diversify supply chains and onshore production.

American consumers are projected to bear 55 percent of the costs stemming from President Trump’s tariffs this year, according to a new analysis from Goldman Sachs. The report, published Sunday, also estimates that U.S. businesses will absorb 22 percent of these costs, while foreign exporters will cover 18 percent, with the remaining 5 percent evaded.

Goldman Sachs economists noted that American firms are likely currently shouldering a larger share of the tariff burden because some levies have recently been implemented. They anticipate these businesses will pass on their costs to consumers over the coming months, as it takes time to adjust prices and negotiate lower import costs with international suppliers.

President Trump has consistently asserted that foreign nations would pay the costs of the tariffs. However, data released last month by the Bureau of Labor Statistics showed that consumer prices in August were 2.9 percent higher compared to August 2024, indicating a potential impact on domestic prices.

Treasury Secretary Scott Bessent, in an interview last month, disputed the notion that tariffs effectively act as a tax on American consumers. White House spokesperson Kush Desai affirmed the administration’s position, stating that “the cost of tariffs will ultimately be borne by foreign exporters,” and highlighted ongoing efforts by companies to diversify supply chains and onshore production in response to the tariffs.

The tariff policy continues to evolve, with Trump recently threatening increased levies on Chinese imported goods. This threat followed Beijing’s requirement for foreign entities to obtain a license for exporting products containing more than 0.1 percent of rare earths sourced or manufactured in China, materials critical for semiconductors and laptops.

Further legal scrutiny awaits the administration’s tariff authority. In November, the Supreme Court is scheduled to hear appeals in multiple cases concerning whether Trump can impose widespread tariffs under the International Emergency Economic Powers Act of 1977, which grants the president power to regulate economic transactions during a declared national emergency.

Outlook on Tariff Impact and Legal Scrutiny

The Goldman Sachs analysis underscores a significant financial burden on American consumers from current tariff policies. Despite the administration’s assurances that foreign entities bear the ultimate cost, the report and recent consumer price data suggest a domestic impact. The upcoming Supreme Court review will critically assess the executive authority behind these tariff implementations.