Tesla revenue dented by softer demand as Musk warns of "rough quarters" ahead
Investing.com -- Despite more than $100 billion in tariff revenue so far this year, it is American importers, not foreign exporters, who are bearing the brunt of President Trump’s trade measures, according to Deutsche Bank (ETR:DBKGn).
In a research note, Deutsche Bank analysts examined U.S. import prices for manufactured goods during the second quarter, when the tariffs were implemented.
“If foreigners were paying for the tariffs, we would expect to see a sharp reduction in the price of imported goods as they absorbed it into their own margins,” the bank wrote.
Instead, the data show only “mild price reductions,” mainly from Canada and, to a lesser extent, the UK.
In China’s case, where average tariff rates rose more than 30%, dollar import prices dropped by just 1%, said the bank.
“To be sure, there are specific industry examples of a greater impact,” Deutsche Bank acknowledged. “For now, however, the top-down macro evidence seems clear: Americans are mostly paying for the tariffs.”
Since consumer price gains have remained relatively contained, the analysts said it suggests U.S. importers are absorbing the costs through narrower profit margins rather than passing them on to consumers.
Deutsche Bank drew three conclusions: first, exporters abroad “are not yet feeling much pain from the tariffs,” which could strengthen their bargaining power ahead of the August 1 trade deadline.
Second, there may be “more pressure on U.S. consumer prices in the pipeline.”
Third, because the economic cost is falling more heavily on the U.S., the situation adds “an added dollar negative” to the broader macroeconomic outlook.