By JOSH BOAK
WASHINGTON (AP) — Tariffs paid by midsize U.S. companies tripled over the past year, new research linked to a major U.S. bank showed Thursday, further evidence that President Donald Trump’s push to charge higher taxes on imports is causing economic disruption.
The extra taxes have meant that companies that employ a combined 48 million people in the United States — the kind of businesses Trump had promised to revive — have had to find ways to absorb the new spending, either by passing it on to customers in the form of higher prices, hiring fewer workers or accepting lower profits.
“That’s a big change in their cost of doing business,” said Chi Mac, director of business research at the JPMorganChase Institute, which published the analysis Thursday. “We also see some signs that they may be moving away from doing business with China and perhaps moving toward other regions in Asia.”
The research does not indicate how the additional costs are being transmitted through the economy, but notes that the tariffs are being paid by U.S. companies. It is part of a growing body of economic analysis that contradicts the government’s claims that the tariffs are paid by foreigners.
The JPMorganChase Institute report used payments data to examine companies that may lack the pricing power of large multinationals to offset tariffs, but may be small enough to quickly shift their supply chains and minimize their exposure to tax increases. The companies typically had revenues between $10 million and $1 billion, with fewer than 500 employees, a category known as “mid-market.”
The analysis suggests that the Trump administration’s goal to rely less directly on Chinese manufacturers has been underway. Payments to China by these companies were 20% below their October 2024 levels, but it is unclear whether that means China is simply funneling its products through other countries or if supply chains have moved.
The authors of the analysis stressed in an interview that companies are still adjusting to the tariffs and said they plan to continue studying the issue.
The Trump administration has insisted that the tariffs are a boon for the economy, businesses and workers. Kevin Hassett, director of the White House National Economic Council, on Wednesday lashed out at research from the New York Federal Reserve that showed nearly 90% of the burden of Trump’s tariffs fell on U.S. businesses and consumers.
“The document is a disgrace. It is, I think, the worst document I have seen in the history of the Federal Reserve system. The people associated with this document, presumably, should be sanctioned,” Hassett told CNBC.
Trump raised the average tariff rate to 13% from 2.6% last year, according to New York Fed researchers. He stated that tariffs on some items such as steel, kitchen cabinets and bathroom furniture were of interest to the country’s national security. He also declared an economic emergency to bypass Congress and impose last April, in an act he called “Liberation Day”, a base tax on products from much of the world.
The high rates caused panic in financial markets, prompting Trump to backtrack on his rates and then engage in talks with multiple countries that resulted in a set of new trade frameworks. The Supreme Court is expected to rule soon on whether Trump exceeded his legal authority by declaring an economic emergency.
Trump was elected in 2024 on a promise to control inflation, but his tariffs have contributed to voter frustration over the cost of living. While inflation has not soared so far during Trump’s term, hiring slowed sharply, and a team of academic economists estimates that consumer prices were about 0.8 percentage points higher than they would have otherwise been.
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This story was translated from English by an AP editor with the help of a generative artificial intelligence tool.
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