New economic research from JPMorgan Chase Institute reveals a dramatic 300% surge in tariff payments by American midsized businesses throughout 2024, directly challenging the Trump administration’s assertion that foreign entities bear the cost of import taxes. The comprehensive study, published Thursday, demonstrates how companies employing approximately 48 million U.S. workers have been forced to absorb substantial new operational expenses through price increases, workforce reductions, or diminished profit margins.
The analysis specifically examined middle-market enterprises—firms generating between $10 million and $1 billion annually with fewer than 500 employees—which possess neither the pricing power of large multinationals nor the agility of smaller operations. According to Chi Mac, the Institute’s Business Research Director, “This represents a fundamental transformation in their cost structure. We’re observing tangible evidence of supply chain diversification away from China toward alternative Asian markets.”
The data indicates payments to Chinese suppliers have declined by approximately 20% since October 2024, though researchers caution this could reflect either genuine supply chain relocation or mere rerouting of Chinese goods through third countries. The Trump administration has maintained that tariffs strengthen national security and economic independence, with National Economic Council Director Kevin Hassett recently dismissing contrary Federal Reserve research as “an embarrassment” that warranted “disciplinary” action.
Despite administration claims of economic benefits, the New York Federal Reserve calculates the average tariff rate has jumped from 2.6% to 13% under Trump’s policies. Academic economists estimate consumer prices have risen approximately 0.8 percentage points higher than baseline projections due to tariff impacts. The Supreme Court is poised to rule on whether Trump exceeded executive authority by declaring an economic emergency to implement tariffs without congressional approval.