Turns out the tariffs are being paid by, drumroll, please, us.

Not foreign companies, us.

From Marketplace, I'm Sabri Beneshaw in for David Brancaccio.

President Trump has long insisted that foreign companies paid for the tariffs he's levied on imports.

Economists have long insisted.

That is not how tariffs work.

And new research from the Federal Reserve Bank of New York

indeed finds that U.S. firms and U.S. consumers have been paying almost all of the tariffs.

Marketplaces Nancy Marshall-Genzor has more on that.

The New York Fed says last year, the average

tariff rate on U.S. imports increased from about 2.5% to 13%. Now, exporters can share the

tariff burden by lowering their prices. The New York Fed says exporters did drop their prices a tiny

bit, but U.S. businesses and consumers still ended up

shouldering nearly 90% of the cost of import taxes. Then the question is, how much of that do

consumers pay? The Congressional Budget Office took a look at that in a report this month on the

budget and economic outlook. The CBO says U.S. business owners will absorb just 30% of the hit from tariffs,

with the remaining 70% passed through to consumers. Fed Chair Jerome Powell has said import taxes

will cause a one-time price increase, which would cause the overall cost of living to rise.

The Nonpartisan Tax Foundation found in a report last fall that President

Trump's tariffs resulted in an average tax increase of $1,000 per U.S. household last year,

rising to $1,300 this year. I'm Nancy Marshall Ginsburg for Marketplace.

Inflation in the U.S. slowed down in January. Prices still rose, of course,

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