US Importers Absorb 94% of 2025 Tariffs; S&P 500 ETF Dips 1.5%
New York Fed study finds US importers absorbed 94% of 2025 tariff burden after average US tariff rate surged from 2.6% to 13%. SPDR S&P 500 ETF Trust fell 1.54% as companies reorganized supply chains, shifting imports from China to Mexico and Vietnam to avoid higher duties.
1. 94% Tariff Burden on US Importers
Over 2025, average US tariff rate jumped from 2.6% to 13%, yet domestic firms paid 94% of the tariff incidence as foreign exporters kept prices steady. American importers absorbed the additional costs, raising input prices for manufacturers and retailers across multiple sectors.
2. Supply Chain Shifts to Mexico and Vietnam
Escalating duties on Chinese goods, including spikes up to 125 percentage points, drove China’s share of US imports below 10%, its lowest since 2017. US companies increased purchases from Mexico and Vietnam to mitigate higher tax rates and preserve profit margins.
3. SPDR S&P 500 ETF Reacts
Shares of the State Street SPDR S&P 500 ETF Trust fell 1.54% following the report, reflecting investor concerns over margin pressure for index constituents. The increased import costs may weigh on corporate earnings across consumer discretionary and industrial sectors.