06/10/2025

Businesses Plan to Pass Half of Tariff Costs to U.S. Customers

Most companies will not absorb expenses from import taxes

President Donald Trump warned U.S. companies to “eat the tariffs,” but the majority of businesses do not plan on heeding that directive. Companies expect to pass along about half of their increased costs to consumers.

That's according to new data from the Federal Reserve Bank of Atlanta, which polled 640 businesses as part of its monthly Business Inflation Expectations Survey. Only about 10percent of businesses indicated they would pass along no cost increases to customers. On average, businesses said they expected to pass through 51.1 percent of a 10 percent cost increase and 47.3 percent of a 25 percent cost increase without hurting current levels of demand.

Atlanta Fed researchers noted that this marks a significant change from President Trump’s first term, when companies passed along nearly all of the cost increases they incurred from the White House’s tariff policy. "Our results suggest many firms believe their customers are price-sensitive enough this time around (perhaps owing to the recent inflationary surge that isn't too far in the rearview mirror)," wrote survey director Kevin Foster, economic research analyst Aaron Jalca and economist Brent Meyer in an online post about the findings published last week.

Please select this link to read the complete article from Inc.