U.S. consumers, businesses shoulder the costs of tariffs, Pantheon Macro says

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New data showed that import prices remained resilient, leaving American businesses and households to bear the costs of tariffs, Pantheon Macroeconomics said.

“President Donald Trump’s assertion that foreigners would pay for his sweeping new tariffs on U.S. imports always was nonsense,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

U.S. import prices gained 0.4% M/M in July, stronger than the 0.1% increase expected [https://seekingalpha.com/news/4486086-us-import-prices-rise-more-than-expected-in-july-export-prices-inch-up] and the prior month's 0.1% decrease, which was revised from +0.1%, according to data released by the Bureau of Labor Statistics on Friday.

Prices have risen by 0.5% since Trump’s election win in November and by 0.2% since March, after which the bulk of the new tariffs were announced.

“The textbooks, and many economists—including the President’s nominee for the Fed Board of Governors, Stephen Miran—had suggested that the uplift to prices for consumers and businesses would be at least partly offset by an appreciation in the U.S. dollar and foreign exporters cutting their pre-tariff prices to maintain market share,” Tombs added

However, the dollar has depreciated considerably, and import prices have remained resilient despite goods imports dropping back very sharply in Q2, suggesting a steep decline in prices ahead is unlikely.

The resilience in the import prices has been broad-based, with prices for imports from Canada seeming to swing wildly in line with commodity prices, said Tombs, adding, “But import inflation for manufactured goods from both the EU and Mexico has slowed only marginally recently, and now seems to be climbing again.”

Chinese exporters, who are facing some of the heaviest U.S. tariffs, have trimmed prices only slightly compared to pre-tariff trends.

But as the U.S. currency slides, Pantheon warns import price inflation could creep toward 5% by early 2026, from just 1% in July.

“The big picture, however, is that the weaker U.S. dollar provides another reason to think that a significant fall in pre-tariff import prices in the coming months is unlikely. That would leave a big jump in costs for U.S. consumers and businesses due to tariffs, with no real offset elsewhere,” Tombs said.

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