WASHINGTON — Mid-sized American companies saw their import tax payments increase threefold during the past year, according to fresh research from the JPMorganChase Institute released Thursday. The findings add to mounting evidence that President Donald Trump’s strategy of imposing higher levies on foreign goods is creating economic challenges.
These additional costs have impacted businesses employing a total of 48 million Americans — precisely the type of companies Trump pledged to strengthen. These firms are now being forced to manage the increased expenses by raising customer prices, reducing their workforce, or accepting smaller profit margins.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director of the JPMorganChase Institute, which published the analysis on Thursday. “We also see some indications that they may be shifting away from transacting with China and maybe toward some other regions in Asia.”
While the study doesn’t detail how these extra expenses are rippling through the broader economy, it demonstrates that American companies are bearing the cost of import taxes. This research joins a mounting collection of economic studies that challenge the administration’s assertions that foreign entities shoulder the tariff burden.
The JPMorganChase Institute examination focused on payment records from businesses that may not possess the market influence of major international corporations to counteract tariff impacts, yet might be agile enough to rapidly adjust their supply networks to reduce exposure to tax hikes. These enterprises typically generated revenues ranging from $10 million to $1 billion and employed fewer than 500 workers — a sector referred to as the “middle market.”
The findings indicate that the Trump administration’s objective of reducing direct dependence on Chinese manufacturing is taking effect. Payments to China from these businesses dropped 20% below their October 2024 figures, though it remains uncertain whether this reflects China redirecting products through other nations or actual supply chain relocations.
The study’s authors stressed during interviews that businesses are still adapting to the tariff environment and indicated they will continue monitoring this situation.
The Trump administration maintains that import taxes benefit the economy, businesses, and workers. Kevin Hassett, director of the White House National Economic Council, strongly criticized research by the New York Federal Reserve on Wednesday that found nearly 90% of Trump’s tariff costs fell on American companies and consumers.
“The paper is an embarrassment,” Hassett told CNBC. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined.”
Trump raised the average tariff rate from 2.6% to 13% last year, according to New York Fed researchers. He justified taxes on various products including steel, kitchen cabinets and bathroom vanities as essential to national security — and proclaimed an economic emergency to circumvent Congress and establish a baseline tax on goods from much of the world last April during an event he termed “Liberation Day.”
The elevated rates triggered financial market turmoil, leading Trump to reduce his rates and subsequently enter negotiations with various countries that resulted in new trade agreements. The Supreme Court is anticipated to decide soon whether Trump exceeded his legal powers by declaring an economic emergency.
Trump won the 2024 election promising to control inflation, yet his import taxes have added to voter concerns about affordability. Although inflation hasn’t surged during Trump’s current term, job growth has slowed significantly, and academic economists estimate consumer prices are approximately 0.8 percentage points higher than they would be otherwise.
