Tariff study fallout: Are Americans footing the bill?

Liesman cites seven different papers (including NY Fed, Goldman Sachs, and Yale) stating that "90% of the president's tariffs are paid by U.S. consumers and businesses." He further notes that "Manufacturing lost 83,000 jobs in the past year." If domestic companies and consumers are footing the bill for tariffs, this acts as a tax on the U.S. economy, compressing corporate margins and reducing consumer purchasing power. The specific data point on job losses indicates that the manufacturing sector is contracting rather than expanding under these conditions. AVOID sectors heavily reliant on imports or domestic manufacturing that faces rising input costs without the ability to pass them on. If importers successfully rearrange supply lines (which Liesman notes is happening slightly) or if deregulation offsets costs, the negative impact may be muted.

Kernen argues that you must look at policies "holistically," suggesting that "oil prices and deregulation" act as offsets to the inflation caused by tariffs. While tariffs are inflationary, a deflationary impulse from lower energy costs (driven by deregulation and increased supply) could neutralize the hit to the broader economy. This implies a potential benefit to the general economy via lower input costs, even if tariffs remain high. WATCH the interplay between tariff implementation and energy deregulation; if energy prices drop significantly, it may cushion the tariff blow. If deregulation fails to materialize or oil prices spike due to geopolitical tension, the "offset" disappears, leaving only the tariff inflation.