Who Pays for Tariffs—And What Are We Really Buying in 2025?

By Miles Carter & Beth (AI)
Updated: May 2025

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Miles:

Beth, Trump says we’re winning. The economy’s stronger, and American factories are coming back. But inflation is climbing again, and now my weekly grocery bill is nearly $50 higher. So let’s ask the real questions:

• Who’s paying?
• How much are we paying?
• What are we getting?
• And who’s actually benefiting?

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Beth:

Let’s break it down.

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🔍 Who Pays—and How Much?

You do. Tariffs are paid by American importers, passed directly to U.S. consumers. According to updated 2025 data:

• The average household is now expected to pay between $4,500 and $7,500 more per year due to the 10% universal tariff and 145% China-specific tariffs (125% reciprocal + 20% fentanyl-related).
• Across ~130 million U.S. households, that totals a consumer burden of up to $975 billion annually in increased costs.
• These price increases hit everything from food and clothes to electronics and cars—items Americans use daily.

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💼 What Are We Getting in Return?

Trump promises these tariffs will revive American manufacturing—but here’s the reality:

• Best-case scenario: Peterson Institute and Moody’s Analytics project tariffs could bring back 50,000 to 90,000 manufacturing jobs.
• Per-job cost: That’s over $10.8 million to $19.5 million per job, when divided by the total consumer burden.
• Most gains will be in high-tech, automated facilities—not traditional factories.

So we’re paying nearly $1 trillion each year for a modest bump in high-skill factory jobs… while prices for toys, TVs, and tires soar.

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🏠 The Automation Reality: You’re Paying for Robots, Not Jobs

This isn’t the 1950s. Companies reshoring today are doing so with next-generation automated factories, not unionized plants full of line workers.

• Intel, Samsung, and TSMC are building chip fabs in the U.S. that require highly skilled workers: AI technicians, robotics engineers, data analysts.
• These new facilities do not create large volumes of low-skill jobs—they create specialized roles that most laid-off factory workers are not trained to fill.
• And as AI continues transforming manufacturing, the number of humans needed per facility shrinks.

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📈 The Hidden Cost: Retirement Savings and the Market Gap

Miles:
Beth, I looked at my 401(k) and it’s still not back to where it was before the tariff news hit. Some folks say it’ll bounce back, but the damage feels permanent.

Beth:
You’re not imagining it. While markets do recover eventually, the time lost to stagnation is a form of permanent opportunity loss. Here’s what happened:

• In April 2025, following the announcement of sweeping tariffs, the S&P 500 dropped more than 8% in three days, erasing over $2.5 trillion in market value.
• Even if the market regains its previous level in 6 months, that doesn’t erase the lost growth.
• A retirement account with $100,000 that grows at 4% annually would be worth $102,000 in six months without disruption. But if the market flatlines during that period, you’re left at $100,000—and that missing $2,000 in growth is forever lost, plus future compounding.

This doesn’t even count additional long-term effects:

• Over a decade, that $2,000 gap could mean $3,000 to $4,500 in compounded losses.
• For Americans nearing retirement, this disruption may mean delayed retirement or lower quality of life.
• Pension funds also suffer, creating funding gaps and pressuring state and municipal budgets.

Bottom line: These are real costs. They’re not visible on a receipt, but they quietly eat away at the financial futures of millions.

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Beth:

Here’s the cold truth:
You are paying more so corporations can build factories that won’t hire you—unless you retrain.

Tariffs are not a job program for displaced workers. They’re a capital deployment strategy for corporations, subsidized by you at the checkout line.

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📚 So What Should We Be Paying For Instead?

If the goal is to bring back good-paying jobs, we need to stop pretending tariffs will do that. Here’s what economists across the political spectrum agree actually works:

• Manufacturing subsidies tied to job creation
• Workforce retraining in AI, robotics, and mechatronics
• Public-private apprenticeships like Germany’s dual model
• Incentives for companies to hire—not just automate

Investing in people, not just machines, is how you rebuild a middle class.

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Miles:

So to summarize—this isn’t “America First.” It’s “Profits First.” The American people are paying up to $7,500 a year so billion-dollar firms can install robot arms in factories that don’t need us. We’re buying the illusion of prosperity—while most of the jobs go to code, not people.

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Beth:

Exactly. Tariffs in 2025 are not solving the jobs crisis—they’re masking it. And unless we invest in the next generation of workers—not just the next generation of factories—the cost of this strategy will only keep rising.