When President Trump began in early 2025 imposing various tariffs on countries and products around the world there was debate about who would wind up bearing the cost of the Trump tariffs. (They are called Trump tariffs because the President has claimed the power to impose them with no further Congressional approval.)

The Federal Reserve Bank of New York has now resolved the debate

In 2025 the Bank found that American consumers and businesses bore about 90% of the cost of President Trump’s sweeping tariffs.

The average U.S. tariff rose from 2.6% to 13%, about 10 percentage points, with dips and spikes along the way as Trump changed his mind one way or another on specific tariffs.

Why does it matter to us?

First, up to November 15, 2025, when we went to the grocery store, even agricultural products we do not grow in the United States faced a new 10% minimum tariff. That 10% tariff on, for example, bananas from Honduras or Peru, wound up being similar to a 10% national sales tax at wholesale.

On November 14, 2025, the White House rolled back the tariffs on some food products, especially bananas, in response to rising costs for U.S. consumers.

Second, living so close to Canada as we do, the Trump tariffs, especially his 25% tariff on vehicles assembled in Canada by Ford, GM, Chrysler and others hurt our neighbor greatly. Canada, perhaps our best friend in the whole world, suddenly looked on the United States as an enemy.

Canadians were understandably shocked by the Trump tariffs in 2025.

Just 37 years earlier in 1988 President Reagan entered into a free trade agreement eliminating all tariffs between the two countries.

President Reagan said at the time, “The people of the United States and Canada have a long and harmonious friendship that is the envy of the world. Now, in addition to sharing the world’s longest undefended border, we will share membership in the world’s largest free trade area.”

Today, Reagan’s “free trade area” is history. Our “long and harmonious friendship that is the envy of the world” is also apparently history for the foreseeable future.

We in Western New York have long benefitted from Canadian shoppers, skiers, tourists, vacation homeowners and passengers out of the Buffalo Niagara Airport. The number of Canadians doing any of those things has fallen, hurting the economy of Western New York.

The Trump tariffs on vehicles assembled in Canada as well as Canadian auto parts has been a huge disruption to the whole, complex system developed over decades by Ford, GM and Chrysler where auto parts and the vehicles themselves moved freely back and forth over the U.S. Canadian border. For decades, for example, the huge Ford Stamping Plant south of Buffalo has had most of its production go to Ford assembly plants in nearby Ontario, whose vehicles then could come into our Country free of any tariffs until last year.

In the big picture, the Tax Foundation found that the new tariffs cost the average American household $1,000 in 2025 and will cost the average household $1,300 in 2026. The Tax Foundation is a non-profit that has studied tax policy for 85 years.

The Manufacturers Association of the Southern tier (MAST), along with the Buffalo Niagara Manufacturing Alliance, has expressed significant concern and opposition to current and proposed tariffs. Among their findings is that for every company benefiting from tariffs, 3 were harmed.

MAST found over 80 % of manufacturers reported higher raw material costs due to the tariffs.

With so many Jamestown-area manufactures still working with steel and aluminum, Trump’s March 2025, 25% tariff on Canadian steel and aluminum, increased for some reason in June 2025, to 50% is of a particular concern to MAST.

Trump’s tariffs are the highest in American history since the infamous Smoot-Hawley tariffs of 1930 under President Herbert Hoover. Most economists point to those tariffs as the primary cause of the Great Depression being so devastating worldwide.

Congress has Constitutional authority over all taxes including tariffs. On February 11, the House of Representatives voted to overturn President Trump’s tariffs on Canadian goods. Even if the Senate were to agree, President Trump would likely veto the law.

For now, it appears tariffs will continue to be imposed by this President. Apparently only the Presidential election of 2028 could move our Country back to the Ronald Reagan view of “free and open markets.”

In 1986 President Reagan declared, ‘I recognize…the inescapable conclusion that all of history has taught: The freer the flow of world trade, the stronger the tides of human progress and peace among nations.”

Fred Larson is a graduate of the Princeton University Woodrow Wilson School of Public and International Affairs, Yale Law School and served as a State University at Fredonia adjunct professor of Business Law from 2005 to 2013.