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Donald Trump keeps saying that foreigners are paying his tariffs. He talks as though he thinks China, Japan, and other trading partners are sending the Treasury checks every month. (They go on the “tariff shelf.”) Who knows what Trump actually thinks, but insofar as there is a story of foreigners paying the tariffs it would take the form of lower import prices. 

We have good data on this. The Bureau of Labor Statistics releases data on import prices every month. We got the data for November on Thursday and it goes the wrong way. Non-fuel import prices rose 0.1% for the month and 0.7% over the last year. It doesn’t look like exporters are eating the tariffs.

There is an argument that import prices are rising less rapidly than would otherwise be the case, but that could only cover a small portion of the tariffs. For example, in the case of China, Trump imposed tariffs of 30%. (I think that’s where we are now.) Import prices from China are down 3.6% year-over-year, or 12 percent of Trump’s tariffs.   

But don’t go out and celebrate too much. China has been experiencing deflation, so goods prices are falling more generally, quite independent of Trump’s tariffs. But exporters are probably eating at least some portion of Trump’s tariffs. 

The story in other countries doesn’t look as promising for the MAGA crew. The index for imports from Japan rose 2.6% year-over-year, the index for imports from Taiwan rose 2.3% year-over-year. Clearly the overwhelming majority of Trump’s tariffs is a tax on us. 

There is an issue of who the us is. Consumers have been seeing much of the tariff increase in the form of higher prices. Goods prices had been falling from the second half of 2023 until the election, when they turned around and began rising. 

It is likely that retailers or intermediaries are eating some of the tariffs in the form of lower profit margins, but the CPI likely rose between 0.5-0.7 percentage points more last year than would have been the case without the tariffs. And there could be more on the way, insofar as businesses were refraining from raising prices in the hope that Trump would reverse his tariffs.

It will take more time to get good data on the ultimate incidence of the tariff, but the part borne by our trading partners is pretty straightforward. If import prices aren’t falling, they aren’t paying.

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