Federal Reserve Governor Stephen Miran has suggested that the burden of trade tariffs is not being shouldered by Americans, as widely believed by economists.
Miran, during an event at the Boston University Questrom School of Business, stated that accounting treatment may be obscuring the true burden of tariffs, as reported by Reuters on Monday. He pointed out that the data might show a U.S. entity bearing the burden is “entirely inappropriate” because, in reality, it is just the U.S. subsidiary of a foreign company.
This challenges the common view among economists that American consumers bear the cost of tariffs through higher prices.
The Fed Governor said he believes that, over time, many experts have gradually aligned with his view, recognizing that the impact of the tariffs on the economy has been “quite muted.”
Rising Prices Linked To Trump Tariffs
Miran’s comments contradict the prevailing narrative about the impact of tariffs. Just last week, Amazon.com (NASDAQ:AMZN) CEO Andy Jassy warned that shoppers were starting to see the impact of President Donald Trump‘s tariffs on the e-retailer’s prices. Meanwhile, the Yale Budget Lab report in January estimated that the annual median cost of the taxes was around $1,400 per American household.
Earlier this month, economist Paul Krugman argued that tariffs had increased U.S. inflation by exactly 0.8 percentage points. Interestingly, last month, Trump himself acknowledged that the consumers “might be paying something” due to his tariffs, but argued that the net impact was largely positive for the economy.
That being said, Federal Reserve Chair Jerome Powell, in January, stated that tariffs are likely to pass through as a “one-time” price increase. He also stated that the effects of tariffs reflected in goods prices would peak and then begin to decline, assuming no new major tariff increases are introduced, and this is expected to occur over the course of the year.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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