Fed paper: Americans ate nearly 100% of Trump's 2025 tariffs

Scott Lincicome (Cato) flags a new Federal Reserve working paper that puts hard numbers on the 2025 tariff experiment. Per his summary of the findings:

"Pass-through of realized tariffs into import prices was close to one hundred percent."

Translation: when Washington slaps a tax on imports, American importers — and eventually American shoppers — pay it. Not Chinese factories. Not foreign governments. Us.

The paper reportedly also finds that local labor market effects from the tariffs were "economically negligible." The promised manufacturing renaissance — the entire sales pitch for the policy — does not show up in the data. Pain on the price tag, nothing meaningful on the paycheck side.

Now a personal caveat, because intellectual honesty cuts both ways. I recently imported two items personally — one around $250, one around $2,000 — and FedEx never billed me a cent in duties. Zero. The macro data and my mailbox disagree, and I'd be lying if I pretended otherwise. A few possible explanations: de minimis treatment on the smaller one, the courier eating the bill rather than chasing it, or the tariff already baked into the seller's price so I paid it without seeing a line item. That last one is actually consistent with the Fed paper — near-complete pass-through means the cost is hiding in the sticker, not arriving as a separate invoice. Either way, one person's mailbox is an anecdote; a Fed working paper with a real identification strategy is evidence. Both can be true at once.

A few other caveats worth keeping in mind. I have not personally read the working paper yet, so the time window and industries covered all matter. Fed working papers are staff research, not official Fed policy. That said, this tracks closely with earlier work on the 2018–2019 tariff round (Amiti/Redding/Weinstein; Cavallo et al.), which also found near-complete pass-through to U.S. buyers. The pattern is consistent, not novel.

If these results hold up, the honest case for broad tariffs gets very thin. "Strategic decoupling from adversaries" is a defensible argument. "Tariffs will bring back jobs and foreigners will pay" keeps hitting the same wall.

What to do with that:

• Read the actual paper before repeating the headline — the link is in Scott's tweet.
• Check your own receipts. Compare the landed cost of something you imported in 2024 to the same item today. If you can't find it in the line items, look at the sticker — that's where it hides.
• If tariffs are hitting your household budget or your business's input costs, say so, on the record, to the people who can change policy: your House rep, your two senators, and USTR's public comment dockets when they open. Those dockets are read; submitted comments become part of the administrative record.
• Primary season is the leverage point. A policy that costs voters money and doesn't deliver jobs is politically exploitable in both parties. Pressure candidates on it.

Skepticism of elite consensus is healthy. Skepticism of policies that empirically take money out of your pocket — and don't deliver the jobs they promised — should be louder.

Source: @scottlincicome on X