The Trump administration acknowledged over the weekend what many economists, business leaders, and everyday consumers have long understood: Americans are the ones ultimately footing the bill for tariffs.
This admission comes after years of claims from Trump and his allies that foreign governments, not American households, were absorbing the cost of trade wars. Now, the president and his economic team concede that tariffs are contributing to higher prices across the board from ports and factories to grocery stores and shopping aisles.
Trump’s sweeping global tariffs, now among the most aggressive in nearly a century, are projected to cost the average U.S. household more than $2,300 annually, according to estimates from the Yale Budget Lab. Companies like Walmart, which once pledged to shield consumers from these costs, are now openly saying they can no longer do so and must pass those expenses on.
Though inflation data has not yet spiked dramatically, many experts believe a broader price surge is only a matter of time.
When Walmart announced plans this week to raise prices, Trump reacted angrily on Truth Social, demanding the company “eat the tariffs.” That outburst effectively acknowledged what economists have been saying for years: someone in the U.S. has to pay, and it’s likely to be the consumer.
Treasury Secretary Scott Bessent later confirmed this reality in multiple Sunday show interviews, saying Walmart might absorb some of the costs but customers would still feel the impact.
This came just days after Commerce Secretary Howard Lutnick dismissed warnings about consumer prices as “silly arguments.” But within a week, the nation’s largest retailer confirmed exactly what those warnings predicted.
The White House tried to maintain its stance, with spokesperson Kush Desai arguing that the U.S. economy is strong enough to force trading partners to shoulder much of the burden. He pointed to recent data showing lower-than-expected inflation, strong job growth, and large-scale investments as proof that the president’s agenda combining tariffs, deregulation, tax cuts, and energy production is working.
Still, Bessent said that despite the expected price increases from tariffs, Americans will benefit from declining gas prices, which he characterized as an effective tax cut. He claimed this would help keep overall inflation under control.
But with the average American vehicle consuming under 500 gallons of gasoline per year, and gas prices down just over 40 cents per gallon from last year, the annual savings per car amounts to around $200. That’s only a small fraction of what tariffs are projected to cost each household.
Several looming tariff deadlines could further escalate costs. A pause on broad reciprocal tariffs expires in early July, and a separate agreement with China on reduced duties is set to lapse in early August unless renewed.
Even if those agreements are salvaged in time, many retailers may have already moved to raise prices meaning consumers will likely experience at least some financial pain in the short term. As one market analyst put it last week, if Walmart is raising prices, it’s almost certain that other retailers will follow.