The Kiel Institute has analyzed more than 25 million individual transaction-level shipping data from U.S. Customs records covering all import shipping.

By combining this information with the applicable tariff rates, they were able to isolate the specific effect of tariffs on import prices.

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The central finding: almost complete transfer to prices

The results are compelling: when the U.S. imposes a 25% tariff, exporters reduce their pre-tariff price by less than 1%, while the final price paid by U.S. importers increases by approximately 24%, or almost the full amount of the tariff.

For every 10 percentage point increase in tariffs, export prices fall by only 0.39%. In other words, for every $100 collected in tariffs, approximately $96 comes out of U.S. pockets and only $4 represents a reduction in foreign exporters’ profits.

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Specific cases: Brazil and India confirm the pattern

The study includes detailed analyses of two tariff increases:

• Brazil (50% tariff, August 6, 2025): After the imposition of the tariff, Brazilian exporters did not substantially reduce their prices. Studies confirm that the tariff was almost completely passed on to U.S. importers.
• India (25% and 50% tariffs, August 2025): Comparing Indian exports to the U.S. with exports to the EU, Canada, and Australia (destinations without new tariffs), they found that export unit values to the U.S. remained unchanged relative to other destinations.

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However, the volume effects were substantial: export values to the US fell by approximately 18-24% relative to other destinations. Indian exporters responded to the US tariffs by shipping less, not by reducing prices.

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Why don’t exporters absorb tariffs?

• Existence of alternative markets: Exporters facing U.S. tariffs may redirect sales to Europe, Asia or other destinations, reducing their incentive to cut prices specifically for U.S. buyers.
• The impossibility of competing with price cuts: An exporter would need to cut its price by one-third just to offset a 50% tariff, a margin cut that would probably not be profitable for most companies.
• Expectations about temporariness: If exporters believe that tariffs may be subject to negotiation, they have less incentive to make costly price adjustments.
• Rigid supply chains: Many U.S. importers cannot easily switch sources. This gives pricing power to existing suppliers.

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Conclusion: a tax on Americans

Kiel’s study is clear: In economic terms, tariffs function as a selective consumption tax on imported goods.

The main effect of tariffs is not to force foreign producers to accept lower prices, but to reduce imports, which means fewer goods, less variety and disrupted supply chains for U.S. companies.

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Implications for Spanish exporting companies

The experience of Brazil and India is particularly relevant: these countries maintained prices and reduced volumes. Spanish companies facing tariffs are likely to follow the same pattern.

• Market diversification: Exporters who do not rely exclusively on a single market maintain better pricing power.
• Maintaining prices in the face of tariffs: Cutting prices drastically to compensate for high tariffs is unfeasible and unprofitable. It is preferable to accept a reduction in volume while maintaining profitability than to enter a race to the bottom in margins.
• Differentiation by quality and technology: In an environment of high tariffs, price competition becomes impossible. The only sustainable way to maintain a position is through products differentiated by innovation, superior quality or specialized technical solutions.
• Value of established business relationships: Customers with established suppliers cannot easily switch sources due to the rigidity of supply chains. These long-term relationships provide bargaining power and the ability to maintain prices even in adverse tariff contexts.