Domestic Burden - The average U.S. tariff rate increased from 2.6% to 13% in 2025, with foreign prices not significantly decreasing to offset this increase [2] - 94% of the tariff incidence was borne by the U.S. in the first eight months of 2025, indicating that American importers paid the tax on top of the original cost of goods [2][5] Supply Chain Shifts - U.S. companies reorganized their supply chains to avoid high tariffs, particularly targeting China, whose share of U.S. imports fell below 10% in 2025 from 25% in 2017 [3] - Mexico and Vietnam gained significant market share as U.S. importers shifted away from high-tariff Chinese goods [3] Exporters Hold Firm - By November 2025, pass-through rates for tariffs dropped to 86%, with a 10% tariff resulting in only a 1.4% decline in foreign export prices [4] - The anticipated relief from foreign price cuts did not materialize, with U.S. firms and consumers continuing to bear the majority of the economic burden from high tariffs [5]