Over the last year, President Donald Trump raised tariffs on American imports to an unprecedented level. While these tariffs were expected to skyrocket prices and cripple import-dependent companies, their true impact had not been felt as strongly as people initially anticipated. A deeper look into this question reveals the complexity of legal loopholes, shipping delays, and a burden placed on American firms.
To delve into this question, economists from Harvard University and the University of Chicago created a working paper that described what actually happened after the tariffs were announced. In reality, importers subjected to tariffs reported paying much less than the amount publicly announced. Some reasons for this included exemptions granted to certain countries, price reduction through the process of shipping, and tariff evasion. Gita Gopinath, a Harvard economist and former first deputy managing director of the International Monetary Fund, explained in a statement that, “The actual tariffs are much lower than what were announced, and that is one of the reasons why the effects have not been as big as feared.”
The US tariff rate at the end of September was concluded to be 14.1 percent, about half of the rate the administration had officially announced. One contributing factor to this was products that were already shipping, which took weeks to deliver.
An example of this is semiconductors exports from Taiwan. Although officials announced that they would put more tariffs on chips and electronics, those higher tariffs did not happen. Consequently, Taiwan only faced a practical tarrif rate of 8 percent compared to an official rate of 28 percent. Canada and Mexico also received exemptions from Trump's tariffs. The US-Mexico-Canada Agreement stated that goods primarily produced in North America qualify for no tariffs. Furthermore, because of the historically low tariffs the US held previously, many companies had ignored adequate compliance with the trade pact when filling out customs forms. However, as the US-Mexico-Canada Agreement expanded US tariffs in 2025, offering additional exemptions for compliant goods. Meeting the rules of the agreement became more critical. Therefore, in 2025, roughly 90 percent of goods coming from Canada and Mexico were declared as compliant, a rise from less than 50 percent than the previous year.
Though many companies and countries are saving money and minimizing the impact of president Trump’s tariffs, these taxes did burden companies and consumers from the US. The Trump administration argued that foreign factories that export products to the US would bear full cost of the tariff. Yet, according to Gopinath and her co-author, Brent Neiman of the University of Chicago, US importers, not foreign suppliers, are bearing the burden of the cost.
Gopinath and Neiman estimated that only 6 percent of the tariff costs were paid by foreign producers. Additionally, US consumers and manufacturers were also paying extra. A working paper published in November by economists at Harvard Business School found that tariffs had elevated the price of imported goods by twice as much as domestically produced ones. “The logic was if foreign firms wished to sell to the mightiest consumer market in the world, they would have to pay a price,” Gopinath articulated. “In reality, the price has been borne by US firms, and not by foreign firms.”
Earlier this year, Concord Academy’s Biotech Club alerted the community about funding cuts to scientific research. Although the main contributor was Trump's declaration to eliminate “waste” and shift priorities on government funding, tariffs may also affect the availability of research materials as many products are manufactured abroad. The existence of these tariffs can even impact the CA student community.