Imagine the howls if Biden did this.
US Consumers Will Bear the Brunt of Tariff Costs
No one with an ounce of common sense would dispute this Bloomberg headline: US Consumers Will Bear the Brunt of Tariff Costs, Goldman Says
- Consumers in the US have absorbed an estimated 22% of tariff costs through June, but their share will rise to 67% if recent tariffs follow the pattern of previous levies, analysts including Jan Hatzius write in a note
- American businesses have absorbed around 64% of the costs of tariffs so far, but their share will fall to less than 10%
- Still, the impact on businesses is mixed — while some have taken a larger share of the tariff hit, domestic producers shielded from competition have raised prices and benefited
- Foreign exporters have absorbed an estimated 14% of the cost of tariffs through June, but their share may rise to 25%
- The impact on foreign exporters can be gauged from a slight decline in import prices on tariffed goods
- The net result: a bump to inflation for the rest of this year. Goldman predicts a year-on-year core PCE reading of 3.2% in December, based on an assumption that underlying inflation net of tariffs would be 2.4%
We can quibble over percentages, but not the headline “Consumers Will Bear the Brunt of Tariffs”.
Hoot of the Day
The Wall Street Journal reports Trump Calls on Goldman to Replace Economist Over Tariff Stance
President Trump on Tuesday appeared to call for Goldman Sachs GS Chief Executive David Solomon to replace the bank’s top economist over his past predictions, in his latest broadside against executives he believes are undermining his goals.
Trump said on his Truth Social social-media platform that Solomon should “go out and get himself a new Economist” because the bank made a “bad prediction a long time ago” on the market and tariffs. The president asserted that tariffs haven’t caused inflation or other issues for the U.S. economy.
He also questioned whether Solomon himself should focus on just being a DJ, a reference to the bank chief’s former side gig.
Trump appears to be referring to Jan Hatzius, the bank’s longtime chief economist, though he didn’t call him out by name or title. Hatzius is well-known on Wall Street for forecasting in 2008 that mortgage defaults could lead to a severe recession.
Hatzius and his team have been among the many economists who have predicted tariff policies would dent labor markets, cause higher inflation and slow U.S. economic growth.
Trump has frequently butted heads with executives and has no qualms about telling them how to run their companies. Last Thursday, he called on Intel Chief Executive Lip-Bu Tan to resign over business ties to China, though he has since appeared to soften his stance toward Tan. Trump also told Detroit carmakers not to raise prices and demanded Walmart “eat the tariffs.” He wants Coca-Cola to use cane sugar instead of corn syrup and has signed executive orders targeting elite law firms with Democratic ties, stripping them of government contracts and security clearances.
Earlier this month, he abruptly fired the head of the Bureau of Labor Statistics, a nonpartisan agency, over lackluster job numbers, claiming statistics had been manipulated. He said this week he would nominate as her replacement E.J. Antoni, the chief economist of the right-wing Heritage Foundation and a longtime critic of the agency.
Truth Social
Truth Social Link: Trillions of Dollars are being taken in on Tariffs, which has been incredible for our Country, its Stock Market, its General Wealth, and just about everything else. It has been proven, that even at this late stage, Tariffs have not caused Inflation, or any other problems for America, other than massive amounts of CASH pouring into our Treasury’s coffers. Also, it has been shown that, for the most part, Consumers aren’t even paying these Tariffs, it is mostly Companies and Governments, many of them Foreign, picking up the tabs. But David Solomon and Goldman Sachs refuse to give credit where credit is due. They made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong, just like they are wrong about so much else. I think that David should go out and get himself a new Economist or, maybe, he ought to just focus on being a DJ, and not bother running a major Financial Institution.
All that can be said is Tariffs have not amounted to much price inflation yet.
But most economists never expected an immediate reaction.
As for “late stage”, Trump delayed tariffs so many times, this is early stage, not late stage.
Front-running the tariffs was massive.
Also, the irony is staggering. Trump warned the automakers, Amazon, and Walmart against raising prices. What does it say when you have to do that?
Tariff Confusion – Who Pays the Tariff
Clever questioning forced Treasury Secretary Scott Bessent into admitting the truth.
Unfortunately, the reporter needed one more follow-up question: Is Trump ignorant of how tariffs work or is he a liar?
I would love to have heard and answer to that.
What’s the Benefit?
Is there a benefit to sounding like an economic illiterate, a carnival barker, and a dictator?
If so, someone please explain.
Some of my readers have suggested some of what Trump does is Epstein avoidance distraction. But I don’t think so.
The press cares much more about Epstein than the public.
Polls show the cost of food and shelter are the two primary things on the public’s mind.
Could Goldman Be Wrong?
Certainly. But the most likely way for Goldman to be wrong is a demand collapse in an accompanied recession.
This would make Trump look bad on the jobs front as well.
Also, the long bond reaction today to the CPI was not good. The 30-year bond yield is 4.89 percent. It was 4.82 percent yesterday.
Since the long bond has not yet given up on stagflation, neither have I. Stagflation is not my call, but we cannot rule it out.
Related Posts
August 1, 2025: Payroll Disaster, Jobs Rise 73,000 but Massive Negative Revisions
Monthly Revisions
- The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000
- The change for June was revised down by 133,000, from +147,000 to +14,000.
- With these revisions, employment in May and June combined is 258,000 lower than previously reported.
August 7, 2025: Continued Unemployment Claims Jump by 38,000 to New High Since Nov 6, 2021
Continued claims hit a new high for the move of 1.974 million. That’s not the full story.
August 12, 2025: The CPI for July Was a Mixed Bag of Good and Bad, Here’s the Details
Year-over-year core CPI is up 0.2 percentage points in July to 3.1 percent.
That more than a full percentage point higher than the Fed wants to see. It was also higher than the Bloomberg consensus estimate of 3.0 percent for July.
The Mish U1 Recession Indicator Is Flashing a Big Warning
On August 8, 2025 I commented The Mish U1 Recession Indicator Is Flashing a Big Warning
My U1 (15-weeks unemployment recession indicator) is very elevated.
Recession is the most likely way for Goldman to be on the high side of inflation.
