U.S. Trade Representative Jamieson Greer examines President Donald Trump’s choice to increase duties on South Korea and a commercial pact between India and the EU on ‘Kudlow.’
White House financial consultant Kevin Hassett on Wednesday urged the New York Federal Reserve to sanction economists who released a study concluding that the majority of the cost from the Trump administration’s duties was borne by American companies and individuals.
“The document is a disgrace. It is, I believe, the poorest quality paper I have ever encountered within the annals of the Federal Reserve system,” Hassett stated in an interview on CNBC’s “Squawk Box.”
“Those involved with this document should arguably be reprimanded, given that they have issued a finding which has generated significant, heavily biased media coverage, resting upon an assessment that would not be deemed valid in an introductory economics course,” Hassett continued.
The New York Fed’s study indicated that American enterprises and individuals shouldered 86% of the cost of duties, while overseas shipments accounted for 14% of the load as of November 2025. The investigators observed that the proportion carried by American enterprises and individuals decreased throughout the year from 94% during the January to August span, and 92% in September and October.
FED DISAGREEMENT WIDENS AS CERTAIN EXECUTIVES CONSIDER A RESUMPTION OF RATE INCREASES DUE TO PERSISTENT PRICE RISES
Kevin Hassett, head of the National Economic Council, advocated for New York Fed researchers to be penalized regarding their study’s conclusion that the U.S. is shouldering the majority of the expense from duties. (Aaron Schwartz/CNP/Bloomberg/Getty Images)
The team also determined that the mean duty rate soared last year as the Trump administration increased import charges, climbing from 2.6% at the start of 2025 to 13% by year-end. The document revealed that the average duty rate reached its zenith at approximately 16% in April and May, subsequent to the president’s declaration of his “Liberation Day” duties.
“Our findings demonstrate that the majority of the impact of duties persistently affects U.S. companies and individuals,” the New York Fed stated, observing that its conclusions were in alignment with two contemporary analyses on U.S. duty cost transfer, which indicated American importers shouldered almost the entire expense.
IMPORT DUTIES MIGHT HAVE IMPOSED A TOLL ON THE AMERICAN FINANCIAL SYSTEM, SEVERAL THOUSAND EMPLOYMENT POSITIONS EVERY MONTH, FEDERAL RESERVE’S REVIEW UNCOVERS
President Donald Trump declared a significant increase in duties during his “Liberation Day” event in April 2025, although some of these duties were enacted at lower levels than he disclosed. (Chip Somodevilla/Getty Images)
These conclusions are also comparable to those present in an assessment by the unbiased Congressional Budget Office (CBO), which observed in its newly published 10-year budget and economic forecast that overseas vendors are bearing approximately 5% of the duty expenses, with the balance of 95% imposed on U.S. businesses and individuals.
The CBO determined that American businesses would transfer approximately 70% of their duty expenses to shoppers, with the other 30% deducted from their earnings. Considering local manufacturers increasing costs due to diminished overseas rivalry, the CBO determined that the “overall impact of duties is to elevate U.S. purchasing costs by the entire share of the expense of the duties incurred locally (95 percent).”
The CBO’s assessment also forecasted that the recent duties levied over the past year would have boosted the personal consumption expenditures (PCE) index by approximately 0.8 percentage points overall by the close of 2026. PCE inflation, which serves as the Fed’s favored measure of price escalation, stood at 2.8% in November as of recent data, significantly surpassing the Fed’s 2% objective.
TRUMP ATTRIBUTES DUTIES TO ACQUISITION OF HUNDREDS OF BILLIONS WITH ‘ALMOST NEGLIGIBLE PRICE ESCALATION,’ PROMOTES STABILITY
During the CNBC interview, Hassett proceeded to advocate for the Trump administration’s duties, asserting that American consumers found themselves more prosperous due to them, concurrently labeling the New York Fed’s assessment a “disgrace.”
“Costs have decreased. Price escalation is reduced progressively. Import prices fell significantly in the first half of the year, then stabilized, and actual earnings increased by $1,400 on average last year, indicating that individuals benefited from the duties,” Hassett stated on CNBC.
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Hassett concluded, “Therefore, individuals could not have benefited from the duties if this New York Fed assessment were accurate. It is truly nothing short of a disgrace.”