--- title: "Strange! Why hasn't the U.S. economy collapsed under the most severe tariffs in nearly a century?" type: "News" locale: "zh-HK" url: "https://longbridge.com/zh-HK/news/263937139.md" description: "The U.S. economy continues to grow despite facing the most severe tariffs in nearly a century, with inflation high but below expectations. Experts believe the impact of tariffs has been exaggerated, as the actual tariff revenue collected is far lower than predicted, with an effective tax rate of about 12.5% for businesses. Many goods evade high tariffs through loopholes and exemptions, and companies are also shifting production to countries with lower tariffs to reduce costs" datetime: "2025-11-03T03:49:52.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/263937139.md) - [en](https://longbridge.com/en/news/263937139.md) - [zh-HK](https://longbridge.com/zh-HK/news/263937139.md) --- > 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/263937139.md) | [English](https://longbridge.com/en/news/263937139.md) # Strange! Why hasn't the U.S. economy collapsed under the most severe tariffs in nearly a century? In April this year, when U.S. President Trump announced large-scale tariff increases, economists predicted that inflation would soar and raised the likelihood of an economic recession. Businesses and consumers rushed to stockpile goods in anticipation of rising prices. Now it seems that **these concerns may have been somewhat exaggerated.** **Although inflation remains high, it is lower than expected.** Despite facing the most severe tariffs in nearly a century, the U.S. economy continues to grow. Kelly Kowalski, Chief Investment Strategist at MassMutual, stated, “I’m not sure the impact of tariffs is as significant as people imagine.” Meanwhile, **the promised benefits of tariffs have largely not materialized**: the tariff revenue collected by the Trump administration is far below the Treasury's forecasts, and there are almost no signs of a boom in domestic manufacturing. The annualized inflation rate in the U.S. in September was 3%, above the Federal Reserve's target of 2%. Tariffs played a role in this, but their impact was limited, primarily pushing up prices for goods like furniture and clothing. One reason is that **the actual tariffs paid by businesses are far lower than the nominal figures.** **The lower-than-expected tariffs and consumption taxes collected by the U.S. Treasury highlight this.** According to an analysis of customs data by Pantheon Macroeconomics, the U.S. Treasury is expected to collect $34 billion in tariffs in October. If this pace continues, the total tariff revenue for the year will reach $400 billion, below Treasury Secretary Mnuchin's August forecast of $500 billion to $1 trillion annually. Pantheon Macroeconomics stated that this tariff revenue indicates that **the effective average tax rate paid by businesses is about 12.5%, significantly lower than the nominal tax rate of over 17% estimated in some calculations.** Loopholes and exemptions mean that many goods can avoid high tariffs. At the same time, businesses have shifted production from countries facing high tariffs to countries like Vietnam, Mexico, and Turkey, where tariffs are lower. This has all contributed to lowering the effective tax rate. “They would say: I’m not abandoning overseas production; I’m diversifying,” said Randy Altschuler, CEO of online marketplace Xometry, which connects manufacturers and suppliers globally. Businesses are also circumventing costs by ramping up inventory before tariffs take effect. Signet Jewelers imports about half of its finished jewelry from India, and its Chief Operating and Financial Officer Joan Hilson stated during the September earnings call that the company plans to utilize bonded warehouses (where products can be stored tax-free for a period) and shift production to other countries to minimize tariff costs. Logistics company GXO operates warehouses across the U.S., and its CEO Patrick Kelleher noted that the company has seen an increasing demand from clients for free trade zones. He also added that businesses are being more cautious about how much product to import to avoid paying tariffs on inventory that will ultimately just sit in warehouses Even if American companies have to pay tariffs in full, **they have only passed on a portion of the costs to consumers**. Bank of America estimates that so far, **consumers have borne 50%-70% of the tariff costs**, with the remainder absorbed by businesses. A key reason is that **corporate profit margins are now much higher than before the pandemic, making it easier for them to absorb tariff costs without raising prices**. Panasonic Macro estimates that retailers have the capacity to absorb 30% of the tariff costs while still maintaining their profit margins at the average levels of the 2010s. Taking the automotive industry as an example. According to JP Morgan data, after seasonal adjustments, the average car price in September was only about 1.1% higher than in March, despite facing tariffs of 15% or more on cars imported from many countries. JP Morgan estimates that this figure means that automakers have absorbed about 80% of the tariff costs, passing only 20% on to customers. Since 2020, car prices have risen significantly, and manufacturers are concerned that consumers simply cannot afford higher prices. Post-pandemic inflation has pushed prices up while also increasing profit margins, making it easier for automakers to absorb tariff costs. The clothing brand Aritzia faces double-digit equivalent tariffs on its imports from Vietnam and Cambodia, and the "small exemption loophole" for small online orders has been closed, meaning many of its products can no longer evade these tariffs. Nevertheless, the company's profitability is sufficient to withstand this blow. Company executives stated in a recent earnings call that without tariffs, the company's adjusted EBITDA margin for the fiscal year would be between 18% and 19%. However, the company's projected margin is still expected to remain in a comfortable range of 15.5% to 16.5%. Company CEO Jennifer Wong stated during the call that the company's pricing strategy is "not based on tariffs." Data from the U.S. Department of Labor shows that **import prices before the imposition of tariffs did not decline significantly, indicating that foreign suppliers generally did not compensate for the impact of tariffs through price reductions.** In addition to inflation, economists have also been concerned that tariffs could weigh on consumer spending, which accounts for nearly 70% of GDP. In April of this year, the consumer confidence index fell to its lowest level since 2022. In the past, a decline in confidence often led to reduced spending. However, this year, **bolstered by record stock markets and low unemployment rates, Americans have been "buying, buying, buying."** Nevertheless, economists say that **it is still too early to declare victory**. They believe that **the costs and uncertainties associated with tariffs have made some companies more hesitant in hiring, which could exacerbate weakness in the job market**. Economists also expect that businesses will ultimately pass a larger share of tariff costs on to consumers. Many companies are gradually raising prices, **which means the impact of tariffs on inflation may persist into next year.** ## 相關資訊與研究 - [Trump: It's possible that we won't](https://longbridge.com/zh-HK/news/280929301.md) - [Commodity Roundup- March’s Top Performers and Underperformers](https://longbridge.com/zh-HK/news/281391044.md) - [The Rise of the Everyday Commodity Hedge in a Volatile Era](https://longbridge.com/zh-HK/news/281414917.md) - [Bank of Iwate Unveils Inflation-Era Medium-Term Plan With Higher Profit and ROE Targets](https://longbridge.com/zh-HK/news/280958985.md) - [Energy Prices Can Jolt China Inflation, But Relief Likely Fleeting if Demand Stays Weak](https://longbridge.com/zh-HK/news/281158005.md)