American consumers will ultimately pay for more than half of the costs associated with President Trump’s tariffs by the end of the year, a new analysis from Goldman Sachs economists indicates.  

The report projects that consumers will shoulder 55 percent of the tariff burden, while American businesses will absorb 22 percent. Foreign exporters make out the best, taking on the remaining 18 percent by reducing prices.

The Goldman Sachs economists said American companies will likely begin passing on more of their tariff costs in coming months.

“At the moment, however, U.S. businesses are likely bearing a larger share of the costs because some tariffs have just gone into effect and it takes time to raise prices on consumers and negotiate lower import prices with foreign suppliers,” the economists said. 

The new projection directly challenges the Trump administration’s repeated claim that foreign governments would be the ones paying the import taxes. The report also warns that the wide-ranging levies could push the inflation rate to 3 percent by December, a full percentage point above the Federal Reserve’s 2 percent target. 

According to the economists, Mr. Trump’s tariffs have already contributed to a 0.44 percent increase in core personal consumption expenditure prices, a key inflation metric used by the Federal Reserve. This aligns with last month’s inflation report from the Bureau of Labor Statistics, which showed price increases for tariff-sensitive products like clothing, furniture, and car parts.

On Tuesday, Mr. Trump’s 10 percent tariffs will hit imported timber and lumber, along with new 25 percent duties on kitchen cabinets, bathroom vanities, and upholstered furniture. The latter import taxes are set to rise to 50 percent on January 1.

The analysis comes amid renewed volatility in trade negotiations between Washington and Beijing. Mr. Trump has threatened to impose a 100 percent tariff on unspecified Chinese products on November 1, causing financial markets to plunge as investors grew nervous about the potential for global commerce to be upended. 

However, Mr. Trump later softened his tone, signaling a desire for a fair settlement. “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment,” Mr. Trump wrote in a social media post. “He doesn’t want Depression for his country, and neither do I.”

Goldman’s projections are contingent on the evolving nature of the trade talks, and its latest analysis does not factor in the potential 100 percent tariff on Chinese goods. The firm had previously lowered its projected consumer impact from a 67 percent share estimated in an August report. That earlier report drew sharp criticism from Mr. Trump, who targeted Goldman and its CEO, David Solomon.

“They made a bad prediction a long time ago on both the Market repercussions and the Tariffs themselves, and they were wrong, just like they are wrong about so much else,” the president wrote in a Truth Social post following the August analysis.

Meanwhile, the release of key economic data has been delayed due to the ongoing government shutdown. However, reports suggest that some furloughed employees are being called back to work to help release the September inflation report, which economists and Fed officials are closely watching for signs of a slowing labor market. The most recent data from August showed U.S. consumer inflation had already risen to 2.9 percent as tariffs began to take effect.