- Americans are mostly paying for tariffs, Deutsche Bank analysts said.
- The analysts examined US import prices for goods to see who was paying for the levies.
- They concluded US companies were eating the tariffs and warned of "more pressure on US consumer prices."
American companies are eating the cost of tariffs, and higher consumer prices may be "in the pipeline," Deutsche Bank said.
Analysts at the bank reached that conclusion after examining the cost of importing manufactured goods in the second quarter, when Donald Trump first proposed his tariffs.
They said that the US government had collected $100 billion in tariff revenue so far this year, "so no doubt someone is paying." They added that if exporters to the US covered the costs, there would be a "sharp reduction in the price of imported goods," but this has not happened.
"The top-down macro evidence seems clear: Americans are mostly paying for the tariffs," the strategists said in a Tuesday note.
They concluded that American companies have been "mostly absorbing the tariffs into their profit margins" because the US consumer price index, up only 0.3% in June, hasn't registered a big increase.
But they warned, "There is likely more pressure on US consumer prices in the pipeline."
The analysts also said the tariffs were hitting the dollar as "exporters in the rest of the world are not yet feeling much pain from the tariffs."
This could give other countries more bargaining power as they negotiate trade deals ahead of Trump's August 1 deadline for resuming many of his tariffs, they added.
The analysts said they found few examples of exporters absorbing the costs of tariffs anywhere in the world.
Dollar import prices in China are down by only 1% "despite an average increase in tariff rates of more than 30%," they noted.
It also said that there are specific industry examples of exporters eating tariffs, citing Japanese automakers cutting the prices of models sent to the US.
The Bank of Japan's corporate goods price report found that the export price index for cars shipped to North America last month fell 19.4% compared to a year prior, the biggest plunge since 2016.
Treasury Secretary Scott Bessent said earlier this month that the US could take in as much as $300 billion in tariff revenue in 2025.
