European Central Bank: U.S. tariffs backfire on themselves, putting pressure on consumers and import businesses

Ask AI · How will long-term tariff backlash affect the U.S. economy?

China News Service, April 3 — According to Reuters, the European Central Bank’s latest research indicates that after the United States imposed tariffs, the related costs were not primarily borne by exporters as claimed by the Trump administration, but were mostly passed on to U.S. consumers and importers.

An article published in the ECB’s “Economic Bulletin” suggests that U.S. consumers currently bear about one-third of the tariff costs. As U.S. companies gradually exhaust their capacity to absorb costs, this proportion could further increase to over half in the long run. Meanwhile, U.S. businesses will also bear approximately 40% of the additional tariff costs over the long term.

The study also points out that although exporters only bear a smaller portion of the direct costs, they are not unaffected. Due to tariffs suppressing trade flows, export volumes are also being dragged down.

The European Central Bank states that the inhibitory effect of tariffs on import volumes is expected to be quite significant. In product categories still affected by tariffs, a 10% increase in tariffs will lead to a 4.3% decrease in import volume.