Midsized Companies Are Being Hammered by Trump Tariffs, Researchers Find

With a Supreme Court decision on the fate of President Trump’s tariffs coming as early as Friday, new research shows midsized American firms are among the most affected by tariff costs.A JPMorganChase Institute analysis released Thursday shows tariff costs have tripled for midsized American businesses and have introduced considerable uncertainty for firms engaged in international trade.Midsize firms — known as the middle market — play an important role in the American economy. Often described as having revenues between $10 million and $1 billion or having 50 to 499 workers, they employ 48 million workers and generate one-third of private sector GDP.The researchers say that midsized firms lack the scale of larger companies, making it harder to absorb sustained increases in import costs. They say further monitoring is important as tariff effects could still take a while to set in.The analysis joins a growing body of research that undermines Mr. Trump’s insistence that most of the burden is falling on foreign companies.Federal Reserve researchers have reported that American companies and consumers bore more than 90 percent of the cost of tariffs last year.“Our results show that the bulk of the tariff incidence continues to fall on U.S. firms and consumers,” New York Fed researchers said in a paper released last week. “These findings are consistent with two other studies that report high pass-through of tariffs to U.S. import prices.”White House adviser Kevin Hassett called the work by the Fed researchers “an embarrassment.” In a CNBC interview on Wednesday, the director of the National Economic Council called the research “the worst paper I’ve ever seen in the history of the Federal Reserve System.”Researchers say some firms may have delayed strategic decisions about imports because of the unpredictable way in which tariffs have been announced and the protracted legal battle over their validity.Mr. Trump levied the worldwide reciprocal tariffs in a “Liberation Day” executive order, relying on the 1977 International Emergency Economic Powers Act. Opponents say the import duties are a use of the law that lawmakers never intended and one that has never been claimed by any previous president.The Supreme Court returns to work on Friday after a nearly month-long break and could release opinions that day or early next week. The Trump administration is asking the justices to overturn decisions by two lower courts which found that Mr. Trump’s use of emergency powers as the basis of his tariffs was an overstep. During a November hearing, several justices seemed skeptical of Mr. Trump’s rationale.Administration officials, including Treasury Secretary Scott Bessent, say they are working on contingency plans to be able to continue the tariffs even if the high court blocks them in their current form.

Midsized Companies Are Being Hammered by Trump Tariffs, Researchers Find

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