BY Rosemary
Tariffs paid by midsize U.S. businesses have more than tripled over the past year, according to new research released Thursday by the JPMorganChase Institute, one of the nation’s leading financial research organizations. The findings provide further evidence that President Donald Trump’s aggressive use of import taxes is creating significant disruptions for American companies and the workers they employ.
The additional costs have placed a substantial financial burden on companies that employ a combined 48 million Americans—exactly the kind of businesses the president pledged to support through his trade policies. In response, many of these firms are adjusting by raising prices for consumers, reducing staff, or accepting lower profit margins to absorb the increased expenses.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director at the JPMorganChase Institute. “We also see some indications that companies may be shifting away from transacting with China and moving toward other regions in Asia.”
While the research does not detail precisely how these costs flow through the wider economy, it confirms that U.S. companies, not foreign exporters, are bearing a substantial portion of the tariff burden. This runs counter to repeated claims from the administration that foreign countries would absorb the new taxes.
The analysis specifically examined middle-market firms—businesses with annual revenues between $10 million and $1 billion and fewer than 500 employees—which may lack the pricing power of multinational corporations but can still pivot supply chains relatively quickly to minimize exposure to tariffs.
Data from the study indicates that payments from these companies to Chinese suppliers were roughly 20% lower than their levels in October 2024. Analysts caution that this does not definitively reveal whether goods are being rerouted through other countries or if supply chains are relocating entirely, but it does suggest some shift away from direct reliance on Chinese manufacturers.
The report’s authors stressed that businesses are still adapting to the new trade landscape and plan to continue monitoring how tariffs affect operational and financial decisions.
The White House did not immediately comment on the findings. In prior statements, officials have consistently argued that tariffs are a boon for American industry, boosting domestic production and employment.
Kevin Hassett, director of the White House National Economic Council, dismissed research from the New York Federal Reserve showing that nearly 90% of the tariff costs fell on U.S. companies and consumers. “The paper is an embarrassment,” Hassett told CNBC. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined.”
Under Trump’s administration, the average tariff rate rose from 2.6% to 13% over the past year. Some tariffs, including those on steel, kitchen cabinets, and bathroom vanities, were justified as matters of national security. In April 2025, Trump declared an economic emergency to impose baseline tariffs on goods from much of the world, in an event he called “Liberation Day.”
The sweeping measures initially rattled financial markets, forcing the president to scale back certain tariffs and negotiate trade agreements with multiple countries. Legal challenges to the economic emergency declaration are currently pending before the Supreme Court, which will soon determine whether Trump exceeded his authority.
Despite Trump’s campaign promise to tame inflation, tariffs have contributed to growing frustration over affordability among American voters. While overall inflation has remained relatively stable, hiring slowed considerably, and academic economists estimate that consumer prices were approximately 0.8 percentage points higher than they would have been without the tariff measures.
The latest report underscores the complex consequences of trade policy on the U.S. economy, particularly for mid-sized companies that form the backbone of employment and economic activity. As these businesses navigate rising costs and shifting supply chains, analysts say the broader effects of tariffs on American workers and consumers are only beginning to emerge.
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