FRANKFURT/WASHINGTON, D.C.: U.S. consumers and companies, not foreign exporters, are footing most of the bill for President Donald Trump’s new import tariffs, early data shows, contradicting the White House’s claims and adding pressure on the Federal Reserve’s battle against inflation.

Trump has long insisted that foreign manufacturers would bear the cost of his protectionist trade policies. However, studies, surveys, and company statements suggest the reality is different: American firms are absorbing much of the hit and gradually passing it on to consumers through higher prices.

“Most of the cost seems to be borne by U.S. firms,” said Harvard professor Alberto Cavallo, who has tracked the impact of tariffs across hundreds of consumer products. “We have seen a gradual pass-through to consumer prices, and there’s a clear upward pressure.”

A White House spokesperson acknowledged Americans “may face a transition period from tariffs,” but maintained that costs would “ultimately be borne by foreign exporters” as companies shift production to the U.S.

So far, imported goods have become four percent more expensive since Trump began imposing tariffs in March, while domestic goods rose by two percent, according to Cavallo and co-authors Paola Llamas and Franco Vasquez, who analyzed prices of more than 359,000 products.

The largest jumps have been in goods the U.S. cannot produce — such as coffee — or those hit hardest by duties, including imports from Turkey. The data suggests that foreign exporters are not absorbing much of the cost, which is consistent with research from Yale University’s Budget Lab, which found that exporters have raised dollar-denominated prices instead.

National export indices echo that trend: prices for goods shipped from China, Germany, Mexico, Turkey, and India have all risen, with Japan the only major exception.

Trump’s new tariffs have raised average U.S. import taxes from two percent to roughly 17 percent, representing about US$30 billion per month in duties. Analysts say it could take months before the full impact on prices and profits becomes clear.

“Firms are trying to find ways to soften the blow and stretch price increases out over time,” Cavallo said.

Companies are already adjusting. Procter & Gamble, EssilorLuxottica, and Swatch have raised prices, while European carmakers have tried to absorb more costs to stay competitive. A Reuters tracker found 72 percent of firms across Europe, the Middle East, and Africa have increased prices since the tariff hikes began.

The inflationary effect is now a key concern for the Federal Reserve. While policymakers remain divided, Fed Chair Jerome Powell estimated tariffs account for 30 to 40 basis points of the latest 2.9 percent core inflation reading. A Boston Fed estimate put the potential increase closer to 75 basis points.

The Peterson Institute for International Economics forecasts inflation will be one percentage point higher over the next year than it would have been without the tariffs, before easing again.

Global trade is also feeling the strain. EU exports to the U.S. fell 4.4 percent year-on-year in July, and German shipments dropped more than 20 percent in August. The World Trade Organization has cut its global trade growth forecast for next year to 0.5 percent, citing the delayed effects of U.S. tariffs.

“The expected impact of U.S. tariffs hasn’t materialized yet,” said Ruben Dewitte of ING Bank. “We anticipate these effects will become more visible in the coming months.”