Consumers are taking a big hit from tariffs

     In 2025, global businesses are feeling the pressure from renewed U.S. tariffs, with S&P Global estimating the costs could exceed $1.2 trillion this year, which is a figure they believe might even be conservative. These tariffs, described as a kind of hidden tax on global supply chains, have created widespread disruptions through higher freight costs and logistics delays. While the White House insists that foreign exporters will shoulder most of the burden and that the tariffs are essential for promoting “fair trade” and bringing production back to the U.S., the evidence strongly suggests otherwise.

    S&P’s analysis shows that only about one third of the financial burden will fall on companies, while the remaining two thirds will land squarely on consumers. In other words, people are paying more for less as real output declines. The situation got even worse earlier this year when the administration removed the "de minimis" exception that allowed imports under $800 to bypass tariffs, a change that analysts call the “real inflection point” for how quickly costs have risen.

    As a result, profit margins are expected to shrink by about 64 basis points in 2025, marking a significant hit to global businesses. While there’s still some optimism that margins could eventually recover as companies adapt using technology and supply chain restructuring, the near term issues are clear. In the end, the trillion dollar tariff squeeze highlights a tough reality, despite political claims, tariffs rarely hurt only foreign exporters most of the cost ends up being paid by everyday consumers.

Source: https://www.cnbc.com/2025/10/16/tariff-costs-to-companies-this-year-to-hit-1point2-trillion-with-consumers-taking-most-of-the-hit-sp-says.html