Here’s a chart showing (unsurprisingly) that consumers pay more and buy less when greedy/foolish politicians impose trade taxes.
The chart comes from a new study published by the Federal Reserve.
Here are some key findings from the research, which was authored by Sinem Hacioglu Hoke and Leo Feler.
This paper uses transaction-level data from a large panel of U.S. households, linked to a subset with survey-reported tariff awareness, sentiment, and behavioral intentions, to study how the 2025 U.S. tariffs reshape household spending. The joint observation of prices, quantities, stated intentions, and revealed behavior from a single source allows us to document both the aggregate response and the behavioral channel behind it. Tariff exposure raises retail prices modestly, with pass-through monotonically decreasing in income, but reduces real spending by a far larger margin. At the aggregate level, both quantities and spending decline sharply, and the contraction is sustained rather than front-loaded, weighing against intertemporal substitution as the primary channel. …Survey evidence suggests…pessimistic households further reallocate their baskets toward essentials and trade down to cheaper varieties within tariff-exposed categories. …Low-income households face the highest pass-through and allocate a larger share of their baskets to tariff-exposed goods, producing a welfare cost much greater as a share of income than for high-income households.
For what it’s worth, the findings shown in Figure 4 are the most important results.
As you can see, lower-income Americans are the biggest victims of Trump’s protectionism.
This is yet another example of poor people being the biggest victims of big government.
