Who Benefits and Who Suffers Amid the Recent Tariff Upheaval

Main Insights

• Following the Supreme Court's recent decision to overturn most of President Donald Trump's emergency tariffs, a new set of beneficiaries and those at a disadvantage has emerged.

• China and Brazil stand to gain the most, as their goods now face reduced U.S. tariffs compared to previous rates.

• American consumers, on the other hand, are unlikely to benefit from any cost reductions, as savings are not expected to be passed down to them.

As the dust settles on the latest changes to U.S. trade policy, economists have begun to pinpoint who benefits and who loses out from the revised tariff structure.

The tariff system underwent a major shift after the Supreme Court determined that most of the import duties imposed by President Trump under emergency powers were unlawful. In response, Trump proposed a universal 15% tariff using a different legal approach.

Previously, tariffs set under the International Economic Emergency Powers Act targeted specific countries with varying rates. Replacing these with a flat rate has created clear winners and losers among trading partners.

Economic Impact

Despite the reshuffling of who pays tariffs, economists note that the overall tariff burden on the U.S. economy remains nearly unchanged, with only a slight reduction in the average rate.

Who Benefits?

China and Brazil are the primary beneficiaries, as their exports to the U.S. are now subject to significantly lower tariffs than before. According to Ryan Sweet, chief international economist at Oxford Economics, Brazil's average tariff rate dropped from 13.5% to 9.6%, while China's fell from 35.2% to 27.2%.

For American businesses, the effects are mixed. Importers generally benefit from the lower overall tariff rates, and some may even be eligible for refunds on tariffs previously paid if they pursue legal action successfully.

However, the ongoing uncertainty surrounding trade policy may discourage U.S. companies from making new investments.

Who Loses Out?

U.S. consumers are among those most negatively affected, as they are not eligible for tariff refunds and are unlikely to see price reductions, even if businesses pay less in tariffs. Companies are expected to keep prices steady, passing on the costs to shoppers.

Kimberly Clausing, a senior fellow at the Peterson Institute for International Economics, explains that since overall tariff rates remain close to their previous levels, consumers will continue to experience higher prices. The longer tariffs persist, the more their costs are reflected in retail prices.

Globally, countries that previously faced tariffs below 15%—such as the United Kingdom, Singapore, and several smaller nations—are now at a disadvantage. Additionally, countries like Japan, Switzerland, and members of the European Union, which had negotiated a 15% cap on tariffs with the Trump administration, may also find themselves worse off under the new system.