Tariffs paid by midsized US businesses tripled over the past year, new research tied to one of the US’ leading banks showed on Thursday — more evidence that US President Donald Trump’s push to charge higher taxes on imports is causing economic disruption.
The additional taxes have meant that companies that employ a combined 48 million people in the US — the kind of businesses that Trump had promised to revive — have had to find ways to absorb the new expense, by passing it along to customers in the form of higher prices, employing fewer workers or accepting lower profits.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director at JPMorgan Chase Institute, which published the analysis on Thursday. “We also see some indications that they may be shifting away from transacting with China and maybe toward some other regions in Asia.”
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The report used payment data to look at businesses that might lack the pricing power of large multinational companies to offset tariffs, but might be small enough to quickly change supply chains to minimize exposure to the tax increases. The companies tended to have revenues between US$10 million and US$1 billion with fewer than 500 employees, a category known as the “middle market.”
The analysis suggests that the Trump administration’s goal of becoming less directly reliant on Chinese manufacturers has been successful. Payments to China by these companies were 20 percent below their October 2024 levels, but it is unclear whether that means China is simply routing its goods through other countries or if supply chains have moved.
White House spokesman Kush Desai called the analysis “pointless” and said it did not “change the fact that President Trump was right.”
The study showed that US companies are paying tariffs that the president had previously claimed would be paid by foreign entities.
Trump defended his tariffs during a trip to Georgia on Thursday while touring Coosa Steel, a company involved in steel processing and distribution. The president said he could not believe the Supreme Court would soon decide on the legality of some of his tariffs, given his belief that the taxes were helping US manufacturers.
“The tariffs are the greatest thing to happen to this country,” Trump said.
The president imposed a series of tariffs last year for the ostensible goal of reducing the US trade imbalance with other countries, so that the US was no longer importing more than it exports. However, trade data published on Thursday by the US Census Bureau showed that the trade deficit climbed last year by US$25.5 billion to US$1.24 trillion.
Trump on Wednesday posted on social media that he expected there would be a trade surplus “during this year.”
Trump increased the average tariff rate to 13 percent from 2.6 percent last year, according to the New York Fed researchers.
He said that tariffs on some items such as steel, kitchen cabinets and bathroom vanities were in the national security interest of the country.
He also declared an economic emergency to bypass the US Congress and impose a baseline tax on goods from much of the world in April last year at an event he called “Liberation Day.”
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