Who pays the tariffs?

When the Supreme Court struck down the IEEPA tariffs in February 2026, it handed economists something a trade war never does: a sudden, court-timed tariff cut. In our inaugural research paper, we read official import and consumer price data through both statutory events, the 2025 imposition and the 2026 removal, to answer the year's most contested question: who actually paid? The answer is uncomfortable for every side of the debate. Foreign exporters absorbed only about one seventh of the duties, concentrated in Chinese consumer goods, and they clawed those concessions back within two months of the ruling. American firms and households paid the rest on the way up, yet through May 2026 shelf prices show no relief on the way down. The early winners of the ruling are importing firms, which stopped paying duties overnight and stand to recover $130 to $160 billion in refunds, while consumers wait on price competition that has not yet arrived. Read the full paper here.