JPMorgan Analysis Shows Tariffs on Midsize Firms Tripled in 2025/ Newslooks WASHINGTON/ J. Mansour/ Morning Edition/ Tariffs paid by midsized U.S. businesses tripled last year, according to new research from JPMorganChase Institute. The findings challenge claims that foreign exporters bear the cost of President Trump’s trade policies. Trade data also show the U.S. deficit widened despite higher import taxes.
Trump Tariffs Impact on Midsize Businesses Quick Looks
- Tariff payments by middle-market firms tripled in 2025
- Companies employ roughly 48 million Americans
- Evidence suggests U.S. firms, not foreigners, pay tariffs
- Payments to China down 20% from late 2024
- Trade deficit rose to $1.24 trillion
- Average U.S. tariff rate climbed to 13%
- White House defends policy as economic boost
- Supreme Court to weigh legality of emergency tariffs
Deep Look: JPMorgan Analysis Shows Tariffs on Midsize Firms Tripled in 2025
Tariff payments made by midsized American companies surged threefold last year, according to new research from the JPMorganChase Institute, offering fresh evidence of how President Donald Trump’s aggressive import tax policies are reshaping business costs across the United States.
The analysis, released Thursday, focuses on so-called “middle market” companies — firms generating between $10 million and $1 billion in annual revenue and employing fewer than 500 workers. Collectively, these businesses support approximately 48 million jobs nationwide, making them a vital component of the U.S. economy.
Researchers found that tariff payments by these companies tripled over the course of 2025, dramatically increasing their cost of doing business. While the study does not fully trace how those added expenses ripple through the broader economy, it suggests that U.S. firms — rather than foreign exporters — are absorbing much of the financial burden.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director at the institute.
The findings add to a growing body of evidence indicating that tariffs are typically paid by domestic importers, who then decide whether to pass costs on to consumers, reduce hiring, or accept lower profit margins.
Businesses Adjust Under Pressure
Middle-market firms often lack the pricing power of large multinational corporations, making it harder to offset tariff-related expenses. At the same time, they may be nimble enough to adjust supply chains more quickly than smaller enterprises.
The data suggest some shifts are already underway. Payments by these companies to suppliers in China fell roughly 20% compared with October 2024 levels. That trend could reflect efforts to diversify sourcing to other Asian markets. However, researchers caution that some Chinese goods may simply be rerouted through third countries, complicating the picture.
The Trump administration has argued that its tariff strategy aims to reduce U.S. reliance on Chinese manufacturing and shrink the trade deficit. On that front, new figures released by the Census Bureau indicate the overall U.S. trade deficit increased by $25.5 billion last year, reaching $1.24 trillion.
Trump responded on social media Wednesday, predicting the United States would post a trade surplus this year.
White House Pushback
The administration has repeatedly defended its tariff program as beneficial for American workers and businesses. Kevin Hassett, director of the White House National Economic Council, sharply criticized research by the Federal Reserve Bank of New York suggesting that nearly 90% of tariff costs fall on U.S. companies and consumers.
“The paper is an embarrassment,” Hassett said in a televised interview, arguing that tariffs are strengthening domestic industry and bargaining leverage.
Last year, Trump raised the average U.S. tariff rate to 13%, up from 2.6%, according to New York Fed researchers. He invoked national security authority to impose higher duties on products such as steel, kitchen cabinets, and bathroom vanities. In April, he declared what he termed an economic emergency — branding the announcement “Liberation Day” — to bypass Congress and apply baseline tariffs on goods from much of the world.
Those moves initially triggered financial market volatility, prompting partial rollbacks and subsequent trade negotiations with multiple countries. The Supreme Court of the United States is expected to rule soon on whether Trump exceeded his legal authority by declaring an emergency to enact the sweeping tariff measures.
Economic Consequences
While inflation has not surged dramatically during Trump’s current term, economists estimate that tariffs have contributed to modest upward pressure on consumer prices. A team of academic researchers recently estimated that consumer prices are roughly 0.8 percentage points higher than they otherwise would have been absent the tariff increases.
Meanwhile, hiring has slowed noticeably in recent months, adding to public concerns about affordability — a key issue in the 2024 election cycle that helped return Trump to office.
For midsized businesses, the challenge remains balancing rising import costs against competitive pressures. Companies may raise prices, reduce payrolls, or search for alternative suppliers to protect margins.
The JPMorganChase Institute emphasized that firms are still adapting and that further research is needed to determine the full economic impact. The institute’s use of payments data offers a granular view of how tariffs directly affect operational expenses — particularly for companies without global pricing leverage.
Broader Trade Debate
The tariff debate highlights a fundamental disagreement over who ultimately pays for import taxes. Economists widely contend that tariffs are borne primarily by domestic importers, while the administration argues that foreign exporters absorb significant costs.
As global supply chains continue to adjust and the legal battle over executive authority unfolds, middle-market firms remain on the front lines of U.S. trade policy.
The coming months — and the Supreme Court’s anticipated decision — may shape not only the future of Trump’s tariff strategy but also the financial trajectory of millions of American businesses navigating higher import costs.
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