I've watched this ridiculous tariff debate pop up again like a stubborn weed as election season heats up. Here we go again.
Tariffs—those taxes slapped on imported goods—have somehow become economic theater where everyone sees what they want to see. Politicians stand on stages declaring with chest-thumping certainty that either "foreign countries are finally paying their fair share!" or "working Americans are bearing an unconscionable burden!"
Can't both be right, can they? Well... no.
Look, I've been covering economic policy for years, and sometimes the most frustrating arguments are the ones where the evidence is actually pretty clear. This is one of those cases.
After diving into research papers that would put most normal humans to sleep (you're welcome), I can tell you that the evidence points in one direction: Americans are footing the bill for these tariffs. Full stop.
The studies examining the 2018-2019 tariff rounds might as well be hitting us over the head with their conclusions. Amiti, Redding, and Weinstein found "complete pass-through of U.S. tariffs to U.S. domestic prices" in their 2019 paper. In plain English? We paid. All of it.
Then there's Fajgelbaum and his colleagues. Their 2020 study estimated Americans coughed up about $51 billion annually, which breaks down to roughly $1,600 per household. That's not exactly loose change you find in your couch cushions.
How does this actually work? It's pretty straightforward. When the U.S. slaps a 25% tariff on, say, Chinese furniture, the American importer—yes, an American company—pays that tax directly to U.S. Customs. That company then has options, none particularly great: eat the cost (goodbye, profits), scramble to find cheaper suppliers (easier said than done), or—what actually happens most of the time—pass those costs onto you and me.
I remember talking with a furniture retailer in North Carolina back in 2019. "We held prices steady for three months," he told me, shifting uncomfortably in his chair. "Then reality hit. Our customers ended up paying every penny of those tariffs, plus a little extra to cover the administrative headache."
Now, tariff defenders pivot here. "But that's not the point!" they insist. "The real purpose is bringing manufacturing back home!"
That's... a completely different argument. And an honest one! But it has nothing to do with the fantasy that foreign countries are somehow mailing checks to the U.S. Treasury.
I find it helpful to think about tariffs as economic pressure. Push down in one spot, and the pressure pops up somewhere else. It's like one of those stress balls—squeeze it, and it bulges between your fingers. The pressure never disappears; it just relocates.
The confusion comes from mixing up who physically hands over money versus who ultimately bears the cost. It's like the corporate tax debate. Corporations write the checks to the IRS, but economists will tell you (between sips of really bad coffee) that those taxes get paid by shareholders through lower returns, workers through lower wages, and customers through higher prices.
What's fascinating (or maddening, depending on your blood pressure) is watching politicians who normally break out in hives at the mention of tax increases enthusiastically embrace tariffs. "No, no—we're not taxing Americans! We're taxing CHINA!" It's a neat trick that falls apart the moment you look at the actual data.
There are legitimate arguments for strategic tariffs in specific circumstances. National security concerns? Sure. Responding to unfair trade practices? Maybe. Protecting certain critical industries? We can talk.
But the conversation would be a whole lot healthier if we started with the basic economic reality: Americans ultimately pay most tariff costs.
The better question isn't who pays—that's settled. It's whether what we're buying is worth the price tag. That's a nuanced discussion about tradeoffs, not some fairy tale where money magically appears from overseas.
I mean, imagine if I told you I found a way to make my neighbor pay my electric bill by putting a special tax on my own circuit breaker. You'd think I was financially delusional or selling something on late-night TV. Yet that's basically the argument being recycled about tariffs.
The evidence is in. Debate closed. Americans pay for American tariffs. We can argue all day about whether they're worth it—that's fair game—but let's at least start from reality.
