As new tariffs take effect, US consumers footing more than half the burden: Report

(NEW YORK) — With new tariffs taking effect Tuesday on furniture and lumber, an analysis released by Goldman Sachs finds American consumers are paying for more than half of the cost of the levies imposed by President Donald Trump.

In a research note to its clients, the global investment and banking giant said U.S. consumers will absorb 55% of tariff costs by the end of this year. American businesses would pay 22% of the costs, foreign exporters would absorb 18% and 5% would be evaded, according to the Goldman Sachs analysis.

Consumers could end up paying 70% of the cost by the end of next year, the report said.

“At the moment, however, U.S. businesses are likely bearing a larger share of the costs because some tariffs have just gone into effect and it takes time to raise prices on consumers and negotiate lower import prices with foreign suppliers,” the analysis adds.

In a statement to ABC News, White House spokesperson Kush Desai said, “Americans may face a transition period from tariffs,” but insisted “the cost of tariffs will ultimately be borne by foreign exporters.”

“Companies are already shifting and diversifying their supply chains in response to tariffs, including by onshoring production to the United States,” Desai said. “Americans can rest assured that the Administration will continue to deliver economic relief from Joe Biden’s inflation crisis while laying the groundwork for a long-term restoration of American Greatness.”

The Yale Budget Lab reported on Sept. 26 that U.S. consumers face an overall average effective tariff rate of 17.9% – the highest since 1934.

In August, Trump blasted Goldman Sachs’ CEO David Solomon and the firm’s economists after they put out a report saying consumers will absorb tariff costs.

The new Goldman analysis, which was released on Sunday, does not take into account Trump’s latest threat to impose additional 100% tariffs on Chinese imports set to take effect on Nov. 1.

And on Tuesday, new tariffs kick in at midnight. Timber and lumber imports will face an additional 10% tariff.

Home-building costs have also been soaring and are expected to climb higher with the new tariffs on lumber. A UBS report said the new tariffs on wood products could add another $1,000 to the average cost of building a home, on top of the $8,000 in tariff costs home builders have already seen this year.

Kitchen cabinets and upholstered furniture will face new 25% tariffs. Homebuilders and some furniture companies have warned that those higher costs could mean higher prices for consumers.

Other domestic furniture makers have celebrated the new tariffs.

“These factories are the most likely to see increased demand for their domestically-produced products, because imported upholstered furniture that was previously in the same price range now will be subject to the new tariffs,” the American Home Furnishings Alliance said in a statement to ABC News.

The U.S. imported $25.5 billion in furniture in 2024, up 7% from the previous year, according to trade outlet Furniture Today. Vietnam and China accounted for roughly 60% of the imports, the report found.

In recent months, Trump has placed country-specific tariffs on the top furniture exporters. Products from Vietnam face a 20% tariff, for instance, while Chinese imports encounter a 30% levy.

The overall price of furniture has gone up 4.7% since August 2024, according to the Bureau of Labor Statistics. Prices for living room and dining room furniture have climbed 9.5%, according to the Bureau of Labor Statistics.

Furniture prices soared 1.4% over three months ending in June, when compared to the previous three-month period, the government’s personal consumption expenditure index shows.

“This is a big jump,” Jason Miller, a professor of supply chain management at Michigan State University, told ABC News in an August interview, noting the index had largely declined between the mid-1990s and the mid-2010s. “It’s difficult to see many positives from a consumer standpoint at the moment.”