Tariffs Grow More Unpopular as Their Costs Hit Americans

American businesses have spent more than a year contending with higher costs from tariffs, and the financial pressure is becoming harder to contain. Many companies initially absorbed at least part of those costs rather than passing them directly to customers. As profit margins tighten and fuel, freight and other operating expenses rise, businesses have less room to continue shielding consumers from higher prices.

At the same time, tariffs are becoming more unpopular. A September Fox News poll found that 64 percent of registered voters said tariffs hurt the U.S. economy, while 30 percent said they help. In April 2025, 50 percent said tariffs hurt and 38 percent said they help.

The shift among Republicans has been even more pronounced. In April 2025, 62 percent of Republicans said tariffs helped the economy and 22 percent said they hurt. The latest poll found 41 percent saying tariffs help and 36 percent saying they hurt. The 40-point gap has narrowed to just five points.

After more than a year of higher tariffs, Americans have had more time to see how the costs work their way through the economy.

There Are Three Places for Tariff Costs to Go

Tariffs are collected from American importers when affected goods enter the United States. A business can absorb some of that expense for a period of time, but doing so reduces its profit margin. Eventually, the cost has to be accounted for through some combination of three channels.

1. Higher prices

Businesses can pass tariff costs along to customers by charging more for their products. Federal Reserve research examining the 2025 tariffs found higher retail prices for affected goods and found that households responded by purchasing less.

Companies do not always raise prices immediately. Businesses worried about losing customers may absorb part of the cost first. But as tariffs continue and other expenses rise, maintaining those lower prices becomes more difficult.

2. Lower wages, benefits or employment

A business that cannot raise prices enough to cover its higher costs may reduce expenses elsewhere. Labor is one of the largest expenses for many companies, putting wages, benefits, hiring, overtime and hours among the areas that can come under pressure.

Federal Reserve reports have documented businesses considering or implementing spending reductions and cuts to overtime or working hours as they deal with higher costs and tighter margins.

Tariffs can therefore reach workers even when the price of a particular product does not immediately increase.

3. Lower returns for owners and shareholders

The third option is for businesses and their owners to absorb the cost through lower profits.

For a small business, that can mean less income for the owner and less money available to invest, expand or hire. For a publicly traded company, weaker profitability can put pressure on dividends and stock valuations.

Those effects are not limited to wealthy investors. Millions of Americans own shares through 401(k)s, IRAs and other retirement accounts. When tariffs reduce returns to American businesses, retirement savers can bear part of the cost.

Tariff Costs Are Becoming Harder to Ignore

The three channels can operate at the same time. A company might raise prices enough to recover part of its tariff costs, reduce expenses to cover another portion and accept a smaller profit margin on the rest.

Federal Reserve reports have found businesses doing exactly that as they respond to higher costs for imported materials and merchandise. Additional pressure from fuel, transportation, energy and other expenses gives companies even less room to absorb tariff costs without making changes elsewhere.

The latest polling does not establish why individual voters have changed their views. It does show that tariffs have become substantially more unpopular after Americans have had more time to experience the policy.

CFE Takeaway

Tariffs do not become cost-free when businesses initially absorb them. The cost eventually reaches Americans in one or more of three ways: higher prices for consumers, lower wages and benefits or fewer jobs for workers, and lower returns for owners and shareholders, including Americans saving through 401(k)s and IRAs.

The growing public opposition to tariffs comes as businesses and consumers have had more time to experience those tradeoffs.