Recently, I came across an interesting study from Harvard. Professors Gita Gopinath and Brent Neiman conducted an in-depth analysis of the actual operation of U.S. tariffs in 2025, and the data was somewhat unexpected.

On the surface, the U.S. tariff peaked at a nominal rate of 32.8% in April, and the statutory rate was 27.4% by September. But these are just the numbers on paper. What is the actual effective rate? After removing exemptions and various exceptions, it fluctuates between 12% and 14%. The difference is still quite significant.

A key concept in the research is called "tariff pass-through rate," which simply refers to how much impact tariffs have on import prices. If the pass-through rate is 100%, then U.S. importers bear the entire cost. The conclusion of the research is somewhat speechless—by 2025, the U.S. will bear 94% of the tariff costs, which is even higher than the 80% during the 2018-2019 trade war period. In other words, tariffs are almost entirely passed on to the prices of imported goods.

What does this mean? Since imported goods account for a large share in American manufacturing, the cost of tariffs ultimately falls on American producers, effectively adding a tax of 1-2 percentage points to the entire manufacturing industry. Consumers will pay more for goods, and production costs will also increase.

Interestingly, another effect of the tariffs has been to alter trade flows. China's share of imports into the United States has dropped from 22% in 2017 to 12% in 2024, and in September 2025, it even fell to 8%, now stabilizing around 10%. Orders are shifting to other countries, but the pressure from tariffs has not lessened much; instead, it has shifted to the entire supply chain.