In the world of economists a tariff is an extra cost and invariably the consumer pays the cost. Thankfully there are alternatives for almost everything that people buy, so tariffs can be avoided by buying domestic. However, if the non domestic is less expensive, better quality, easier to buy and a host of other things, at some point the tariff will be added to the product. Ever since Liberation Day, President Trump has claimed foreign countries pay the tariff.

In an article by Ana Swanson and Sydney Ember of the New York Times News Service, researchers at the New York Federal Reserve Bank and Columbia University suggests that through November of 2025, 90% of the economic burden of the tariffs fell on US companies and consumers.

Every company in the world marks up their products to earn a profit, what that markup will depend on a great number of variables, but tariffs would eat into that markup. In order to keep prices down or near the same, if the company cannot find alternatives in the short term, sometimes they make less money or their margins fall.

Who ultimately pays the cost of tariffs – when an importer of record is first responsible for paying the tariff to the US government. The importer of record, often a US company, can pass the cost on to others by raising prices. If the middleman or wholesaler then passes it to a retailer or distributor of the good.

President Trump has often said the cost of the tariff is borne by the foreign supplier. The foreign supplier can reduce their prices to participate in the US marketplace.

The New York Fed study found that from January 2024 to November 2025, the bulk of tariffs have fallen on US companies and consumers. In the first 8 months of 2025, 94% of the tariff’s incidence was borne by the US.

Many companies tried to front end the tariffs by stockpiling inventory, however as inventory levels fall, avoidance of the cost of tariffs will no longer be an option.

Linking to dividend paying stocks, one of the reasons to like these companies is they typically have a wide variety of income sources or they are diversified through the cycle of the economy. This means that they can weather the political storms for a little while, but eventually the company will report margins. If they fall the stock price falls or the company must keep its margins which help investors stay for the long-term.

There are more questions than answers, till the next time – to raising questions.