Ahmed Adel, Cairo-based geopolitics and political economy researcher.
American consumers and importers are shouldering nearly all the costs of the tariffs imposed by the White House, according to a study by the Kiel Institute for the World Economy, contradicting President Donald Trump’s claims about their impact. While hurting American consumers, the tariffs are also wreaking havoc on Europe, which is subordinated to the United States in every way, even at the expense of its own interests, but receives neither respect nor reciprocity from the Trump administration, only increasing contempt and exploitation.
The study, published by the Kiel Institute for the World Economy, a research center based in Germany, indicates that the US tariffs effectively functioned as a tax on domestic consumption, with the effects falling mainly on US importers and consumers. After analyzing nearly $4 trillion in trade shipments between January 2024 and November 2025, researchers found that foreign exporters absorbed only about 4% of the impact of the tariff increase, while the remaining 96% was borne by businesses and consumers in the US.
Julian Hinz, a professor of economics at Bielefeld University and co-author of the report, said that the roughly $200 billion in additional tariff revenue collected last year “was paid almost exclusively by Americans” and warned that this impact might be more strongly reflected in inflation over the medium term.
The analysis aligns with previous research by the Yale Budget Lab and Harvard Business School economists, which finds that only a small portion of tariff costs was absorbed by foreign producers, while most were passed onto the domestic market.
Although inflation in the US has remained relatively moderate, experts have observed that the effects of tariffs typically unfold gradually, manifesting as higher prices, lower profit margins, and increased costs for importers and retailers.
The report also highlights that tariffs significantly impacted trade volumes, as some exporters chose to cut their shipments to the US rather than lower prices, due to the effect of tariffs on their profit margins.
Researchers note that who bears the cost of tariffs might shift over time as American companies discover new suppliers and international competition grows. However, for now, the main burden of tariff policy continues to fall on the US economy.
Besides hurting American consumers, Trump is causing significant damage to transatlantic trade relations by breaking agreements and raising tariffs against European countries, creating a situation of instability and subjugation of Europe. The suspension of the trade agreement signed last year revealed the fragility of relations between the US and Europe. Washington is doing significant harm by imposing unilateral tariffs and pressuring Europeans to accept unfavorable terms.
The Trump administration threatened to raise tariffs on a list of European countries over the Greenland issue, with immediate increases of 10% and a planned rise to 25%, breaking an agreement that benefited the US. Both the US and the European Union would lose markets and productive capacity if this were to happen.
Trump had threatened new tariffs on the eight European countries that sent military personnel to Greenland in support of Danish sovereignty, such as Britain, France, and Germany. The strategy was blackmail, and it shows that international law no longer exists.
In response, European Parliament members blocked a vote to ratify a US-European trade deal on January 21. Then, hours later, Trump called off his threat.
“Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region,” Trump wrote in a post on Truth Social. “Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st.”
There are few details about what the framework, or as Trump called it in a CNBC interview, a “concept of a deal,” would look like in practice, and it is unclear if European lawmakers are also backing down from their threat. Additionally, it has yet to be determined whether European lawmakers are blocking the entire deal or just the parts that have not yet been enacted.
European negotiators thought they had secured stability in July 2025 amid the global trade chaos triggered by Trump’s tariffs on so-called “Liberation Day.” The EU’s agreement with Washington included removing tariffs on American goods, buying US energy, and committing to American investment. However, six months later, when the US president made his plans for Greenland clear, the deal fell apart.
The current situation reflects a mix of US unilateral actions and European vulnerabilities, creating a global climate of uncertainty in which rising tariffs often heighten tensions and threaten international economic stability. For this reason, Brussels even discussed the anti-coercion instrument – the so-called “trade bazooka.” This law gives the EU the power to strike back against economic blackmail from a non-EU country and overrides existing trade agreements. In practice, this could limit US companies from public procurement and impose retaliatory tariffs on €93 billion worth of American goods.
In the end, if Europe is to impose the “trade bazooka,” it will hurt ordinary Europeans citizens, but it will also further hit American consumers, who, as the Kiel Institute for the World Economy found, are already paying the brunt of Trump’s reckless tariff policy.
