Tariff payments by midsize US businesses grew three times over the past year, according to new research released Thursday by JPMorganChase Institute. One of the US' leading banks, it added that this shows signs of economic strain linked to President Donald Trump’s tariff policies.
The JPMorgan study, cited by the Associated Press, indicates that companies employing a combined 48 million people across the US, a segment frequently highlighted in Trump’s economic messaging, are facing mounting cost pressures. Businesses have been forced to adapt by raising prices, trimming hiring, or absorbing the impact through reduced profit margins.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director at the JPMorganChase Institute, which published the analysis. “We also see some indications that they may be shifting away from transacting with China and maybe toward some other regions in Asia," he added.
The report stopped short of detailing how the added costs ripple through the broader economy, but it did clarify that US firms are bearing the tariff payments. The findings add to a widening set of studies challenging the administration’s long-standing assertion that the burden falls primarily on foreign exporters.
Researchers at the JPMorganChase Institute relied on payments data to examine businesses that typically lack the pricing leverage of large multinationals, yet retain enough flexibility to reconfigure sourcing strategies. The companies analysed generally fell within the “middle market” bracket, with annual revenues ranging from $10 million to $1 billion and workforces of fewer than 500 employees.
The data suggested progress toward one of the administration’s stated objectives, which is reducing direct dependence on Chinese manufacturing. Payments flowing to China from these firms were running roughly 20 per cent below October 2024 levels. However, the study notes that the figures alone cannot determine whether supply chains have genuinely shifted or if goods are simply being rerouted through intermediary countries.
The authors emphasised that businesses remain in a transition phase, describing tariff-related adjustments as ongoing. They indicated that further analysis is planned as trade patterns continue to evolve.
White House deputy press secretary Kush Desai dismissed the findings, calling the analysis “pointless” and saying it didn't “change the fact that President Trump was right.” The study, however, shows US companies paying duties that President Donald Trump has previously argued would be absorbed by foreign entities.
During a visit to Georgia on Thursday, Trump reiterated his defence of the policy while touring Coosa Steel. He expressed confidence that the measures were benefiting domestic industry and voiced disbelief that the US Supreme Court would weigh the legality of certain tariffs. “The tariffs are the greatest thing to happen to this country,” Trump said.
Despite the administration’s argument that higher duties would help narrow trade imbalances, newly released figures from the US Census Bureau showed the trade deficit widening last year. The gap increased by $25.5 billion, reaching $1.24 trillion. Trump stated on social media this week that he expects a trade surplus “during this year.”
Senior officials have continued to frame tariffs as an economic positive. Kevin Hassett, director of the White House National Economic Council, sharply criticised separate research from the Federal Reserve Bank of New York, which concluded that nearly 90 per cent of tariff costs were borne by domestic businesses and consumers.
“The paper is an embarrassment,” Hassett told CNBC. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined.”
According to New York Fed researchers, Trump raised the average US tariff rate to 13 per cent last year, up from 2.6 per cent. The administration justified elevated duties on products including steel and household fixtures on national security grounds. In April 2025, Trump invoked an economic emergency declaration — unveiled at an event branded “Liberation Day” — to implement a broad baseline tariff.
Those moves initially unsettled financial markets, triggering volatility that later eased as the administration adjusted rates and pursued trade negotiations with multiple countries. The Supreme Court is now expected to determine whether the emergency declaration exceeded presidential authority.
Although inflation has remained relatively stable during Trump’s current term, economic indicators have shown signs of strain. Hiring growth slowed markedly, and academic economists estimate that consumer prices are approximately 0.8 percentage points higher than they might otherwise have been without the tariffs.