US companies have so far absorbed most of the costs of US President Donald Trump’s tariffs, but the burden is increasingly going to shift to consumers, according to research by Goldman Sachs.
Consumers in the US have absorbed an estimated 22% of tariff costs through June, but their share will rise to 67% if recent tariffs follow the pattern of previous levies, analysts including Jan Hatzius write in a note.
American businesses have absorbed around 64% of the costs of tariffs so far, but their share will fall to less than 10%.
Still, the impact on businesses is mixed — while some have taken a larger share of the tariff hit, domestic producers shielded from competition have raised prices and benefited.
Foreign exporters have absorbed an estimated 14% of the cost of tariffs through June, but their share may rise to 25%.
The impact on foreign exporters can be gauged from a slight decline in import prices on tariffed goods.
The net result: a bump to inflation for the rest of this year. Goldman predicts a year-on-year core personal consumption expenditure reading of 3.2% in December, based on an assumption that underlying inflation net of tariffs would be 2.4%.
Source: theedgemalaysia