What are the costs of tariffs, and who pays them?

Bloomberg’s Odd Lots team reviews new research published by Stephanie Schmitt-Grohé and Martín Uribe finding that tariffs are not costless, but may not be inflationary or contractionary. Goldman Sachs sees US consumers bearing the brunt of tariff costs, per Bloomberg. Fearing customs chaos, many shippers are suspending US shipments, reports the New York Times.

Mentioned publications

Tariffs Are Not Costless – Odd Lots, Bloomberg, August 13, 2025
Stephanie Schmitt-Grohé and Martín Uribe argue tariffs impose real costs, even if they do not necessarily cause inflation or economic contraction. Their research challenges assumptions that tariffs are harmless, showing they affect trade flows and pricing dynamics. The article explores how these costs manifest across sectors and why policymakers should reconsider the long-term implications of protectionist measures.
Transitory and Permanent Import Tariff Shocks in the United States: An Empirical Investigation – National Bureau of Economic Research, July, 2025
This paper investigates how temporary and permanent tariff shocks influence the US economy. It finds that while transitory tariffs have limited impact, permanent ones can alter consumption, investment, and trade patterns. The study uses empirical data to assess inflationary pressures and GDP effects, offering nuanced insights into the economic consequences of sustained protectionism.
US Consumers Will Bear the Brunt of Tariff Costs, Goldman Says – Bloomberg, August 11, 2025
Goldman Sachs warns that US consumers will absorb most tariff costs through higher prices. The analysis suggests businesses may pass on expenses rather than absorb them, leading to inflationary pressure. The report highlights risk to consumer spending and economic growth, especially as tariffs expand to more sectors.
Fearing Customs Chaos, DHL Joins Others in Suspending U.S. Shipments – Christopher F. Schuetze, The New York Times, August 22, 2025
DHL and other shippers suspend US-bound shipments due to the end of the de minimis exemption, fearing customs delays and cost increases. The move disrupts e-commerce and small parcel trade, raising concerns about supply chain resilience. The article explores how regulatory changes are reshaping logistics and international commerce.