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U.S. businesses have seen a threefold increase in tariff payments over the past year, according to new research released Thursday by the JPMorganChase Institute. The findings provide further evidence that President Donald Trump’s import tax policies are creating significant economic challenges for American companies.
The analysis reveals that these additional taxes are affecting businesses that collectively employ approximately 48 million people across the United States—precisely the type of companies Trump had pledged to strengthen during his campaign. These mid-sized firms now face difficult choices: absorb the increased costs, pass them on to consumers through higher prices, reduce their workforce, or accept reduced profit margins.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director at the JPMorganChase Institute. “We also see some indications that they may be shifting away from transacting with China and maybe toward some other regions in Asia.”
While the research doesn’t specifically detail how these additional costs are being distributed throughout the economy, it clearly indicates that American companies—not foreign entities—are bearing the burden of these tariffs. This conclusion adds to a growing collection of economic studies that contradict the administration’s repeated claims that foreign countries are paying these import taxes.
The JPMorganChase Institute focused on “middle market” businesses—those with annual revenues between $10 million and $1 billion and fewer than 500 employees. These companies typically lack the market power of large multinational corporations to offset tariff costs but may be nimble enough to rapidly adjust supply chains to minimize exposure to the tax increases.
The analysis suggests that the Trump administration’s goal of reducing direct reliance on Chinese manufacturing is happening. Payments to China by these middle market companies have fallen 20% below their October 2024 levels. However, it remains unclear whether this represents a genuine shift in supply chains or simply indicates that Chinese goods are being rerouted through other countries to avoid the tariffs.
The researchers emphasized that businesses are still adapting to the tariff regime and noted their intention to continue monitoring these developments.
The Trump administration has consistently maintained that tariffs benefit the American economy, businesses, and workers. Kevin Hassett, director of the White House National Economic Council, recently criticized research by the New York Federal Reserve showing that nearly 90% of Trump’s tariff burden has fallen on U.S. companies and consumers.
“The paper is an embarrassment,” Hassett told CNBC. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined.”
Under Trump’s policies, the average tariff rate jumped from 2.6% to 13% last year, according to New York Fed researchers. The president justified higher taxes on certain products like steel, kitchen cabinets, and bathroom vanities as necessary for national security. In April, at an event he dubbed “Liberation Day,” Trump declared an economic emergency to bypass Congress and impose baseline taxes on imports from many countries.
These high tariff rates triggered financial market turmoil, forcing Trump to scale back some increases and engage in trade negotiations with multiple countries, resulting in new trade frameworks. The Supreme Court is expected to soon rule on whether Trump exceeded his legal authority by declaring an economic emergency.
Trump’s 2024 election victory was partly based on his promise to control inflation. However, his tariff policies have contributed to ongoing consumer concerns about affordability. While inflation hasn’t dramatically increased during Trump’s current term, job growth has slowed considerably, and a team of academic economists estimates that consumer prices are approximately 0.8 percentage points higher than they would have been without these tariff policies.
As businesses continue adjusting to this new trade landscape, the full economic impact of these tariff increases remains a developing story that economists and policymakers are closely monitoring.
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14 Comments
This analysis highlights the significant financial pressure that tariffs are putting on mid-sized American businesses. It’s concerning to see the potential for reduced profits, job losses, or higher prices for consumers. Policymakers must carefully weigh the trade-offs.
The shift away from China could be a strategic move, but it will be important to monitor how this affects other trading partners and the overall costs for these firms.
Tripling of tariff payments is a worrying development for mid-sized US firms. These companies play a vital role in the economy, and the increased costs could force difficult choices like layoffs or price hikes. Policymakers should consider the broader implications.
It’s interesting to see the potential shift toward other Asian markets. This could provide some relief, but it’s crucial to understand how it impacts overall supply chains and competitiveness.
This analysis underscores the significant financial burden that tariffs are placing on mid-sized American firms. It’s concerning to see the potential impacts on jobs, prices, and the broader economy. Policymakers should weigh these real-world effects carefully.
I’m curious to see if these companies can absorb the increased costs or if they’ll need to pass them on to consumers. The ripple effects of these trade policies bear close watching.
The tripling of tariff payments by mid-sized US firms is a concerning trend that deserves close attention. These companies are the backbone of the American economy, and the increased costs could have far-reaching impacts. Policymakers should carefully consider the real-world effects.
It will be interesting to see how these firms adapt and respond to the challenges posed by the tariffs. Maintaining competitiveness and profitability is crucial for the health of the broader economy.
This analysis provides valuable insights into how the administration’s tariff policies are directly impacting American businesses. It’s concerning to see the significant financial burden placed on mid-sized firms, which play a crucial role in the US economy.
I wonder if the companies will be able to adapt or if we’ll see further disruptions to supply chains and employment. It’s a complex issue with important economic implications.
The findings are concerning, as tariffs are clearly creating financial challenges for mid-sized US firms. I’m curious to see how these companies adapt and respond to the increased costs, whether they pass them on to consumers or look to other markets.
It will be important to monitor the downstream effects on jobs, prices, and the broader economy. Policymakers should carefully consider the real-world impacts of these trade policies.
Tripling of tariff payments by mid-sized US firms is a worrying trend. These companies are the backbone of the American economy – it’s crucial they can remain competitive and profitable. I hope policymakers carefully consider the unintended consequences of the tariffs.
Shifting supply chains away from China could provide some relief, but it will be important to monitor how this affects other trading partners and the overall costs for businesses.