President Donald Trump’s sweeping 2025 tariff policy is projected to cost global businesses more than $1.2 trillion, according to a new analysis from S&P Global, with the majority of the impact falling on consumers rather than corporations. The report highlights how these trade barriers are creating ripple effects across supply chains, consumer prices, and global profit margins.
S&P’s white paper, released Thursday, estimates that only about one-third of the total cost will be absorbed by companies, while consumers will shoulder the remaining two-thirds. “While Americans may face a transition period from tariffs upending a broken status quo that has put America Last, the cost of tariffs will ultimately be borne by foreign exporters,” said White House spokesman Kush Desai.
However, S&P Global’s findings contradict that assertion. Based on data from over 15,000 analysts covering 9,000 companies, the report suggests that consumers are already facing higher prices and reduced output as a result of the tariff regime.
“The sources of this trillion-dollar squeeze are broad. Tariffs and trade barriers act as taxes on supply chains and divert cash to governments; logistics delays and freight costs compound the effect,” wrote Daniel Sandberg, the lead author of the report. He added that the trend represents a “systemic transfer of wealth from corporate profits to workers, suppliers, governments, and infrastructure investors.”
Trump first imposed a 10% blanket tariff on all imported goods in April, followed by specific “reciprocal” duties on dozens of countries and targeted tariffs on items like automobiles, kitchen cabinets, and timber. While the administration maintains that exporters will pay the bulk of the levies, S&P’s analysis indicates otherwise.
The firm projects a $907 billion hit to publicly covered companies, with additional impacts across private equity and venture capital sectors. “Consumers are paying more for less, suggesting that this two-thirds share represents a lower bound on their true burden,” said Sandberg.
The Federal Reserve is monitoring the situation closely as policymakers assess whether tariffs could contribute to inflationary pressures. So far, officials view them as a temporary price shock rather than a long-term inflation driver. S&P Global found that most analysts expect corporate profit margins to contract by 64 basis points in 2025, easing to 28 basis points in 2026, and stabilizing near 8–10 basis points in later years.
“In effect, 2025 locked in the hit; 2026 and 2027 will test whether the market’s optimism about re-equilibration is warranted,” the report noted. It added that future performance will depend on how companies adapt through cost control, automation, and supply chain restructuring.
The White House insists that companies are already reshoring production and diversifying supply chains to strengthen U.S. industry. “Companies are shifting and diversifying their supply chains in response to tariffs, including by onshoring production to the United States,” said Desai.
One of the biggest shocks came in May, when Trump ended the “de minimis” exemption for imports under $800. S&P Global called the move a “real inflection point,” as the exception had shielded many low-cost goods from tariffs. Its removal led to immediate disruptions in shipping data, corporate earnings, and executive outlooks.
Sandberg noted that the long-term impact will depend on whether these disruptions are temporary or structural. “In the optimistic scenario that this turbulence is temporary, the Trump administration’s tariff agenda and the resulting supply chain realignments are viewed as transitory frictions, not permanent structural taxes on profitability,” he said.
The analysis underscores a growing divide between White House optimism and Wall Street caution, as global markets brace for what could become one of the most expensive trade experiments in modern history.