Trump Tariffs Hit American Consumers Harder Than Trade Partners
A senior official at the European Central Bank has argued that the United States - not its trading partners - has paid the heaviest price for the tariffs introduced by President Donald Trump.
- The U.S. absorbed most of the tariff burden, not foreign exporters.
- Consumers are now paying roughly half the cost through higher prices.
- Tariffs added over 0.5 percentage points to U.S. inflation.
- Trade shifted to other countries instead of shrinking overall.
Speaking in Venice on February 21, 2026, Governing Council member Fabio Panetta said the U.S. economy absorbed around 90% of the burden created by the trade barriers. According to his assessment, foreign exporters carried only a small share of the impact, while American businesses and consumers ultimately picked up the bill.
Inflation and Consumer Pressure
Panetta explained that in the early stages, U.S. companies reduced profit margins to cushion the blow. Over time, however, those additional costs filtered through supply chains and into retail prices. He estimates that American consumers are now covering roughly half of the total tariff burden.
The trade measures, he said, have added more than 0.5 percentage points to U.S. inflation, keeping price growth above the Federal Reserve’s target and complicating monetary policy.
Trade Flows Rerouted, Not Reduced
While imports from China declined following the tariffs, Panetta noted that supply chains quickly adjusted. Goods previously sourced from China were increasingly replaced by imports from Mexico, Vietnam, and Taiwan, suggesting the policy reshaped trade routes rather than shrinking overall dependence on foreign production.
He stressed that in a deeply interconnected global economy, long-term prosperity cannot be built on isolation.
Legal and Economic Backdrop
The comments come just one day after the Supreme Court of the United States ruled 6-3 that the president cannot rely on emergency powers under the International Emergency Economic Powers Act to impose sweeping global tariffs. The decision struck down much of the existing framework behind the levies.
Despite the tariffs’ stated goal of boosting domestic industry, recent data show factory employment declined by 83,000 jobs between January 2025 and January 2026. Meanwhile, the U.S. goods trade deficit climbed to a record $1.24 trillion in 2025, indicating the measures have not significantly narrowed the trade gap.
Independent analysis from the Tax Foundation estimates that the 2025 tariffs amounted to an average annual cost of about $1,000 per U.S. household.
Taken together, Panetta’s remarks add to a growing debate over whether the tariff strategy has strengthened the U.S. economy – or simply shifted costs onto American consumers while global trade patterns quietly adapt.
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