JPMorganChase Institute finds midsized US firms triple tariff payments

US tariff policy is doing what tariffs reliably do: taxing supply chains while politicians narrate it as “strategic.” A new JPMorganChase Institute analysis, cited by WTOP, finds that tariffs paid by midsized US firms tripled last year. The detail that matters is not the headline number but who pays: not “foreign exporters,” but domestic importers that sit in the middle of production networks—firms large enough to trade, small enough not to have an army of customs lawyers and offshore routing options.

The JPMorganChase Institute work frames tariffs as a material new cost line for these companies, which typically import intermediate inputs rather than finished consumer goods. That distinction matters because input tariffs propagate through the economy: they raise marginal costs for domestic producers, compress cash flow, and force price increases or margin cuts. Either way, the policy functions like a selective consumption tax on anything that crosses a border before becoming “Made in America.”

If tariffs were supposed to “fix” the external accounts, the macro scoreboard is unimpressed. WTOP reports the US trade deficit slipped to $901 billion last year, hardly a triumph given the scale of the gap. Meanwhile, Zero Hedge highlights that the deficit unexpectedly worsened late in the year as exports slumped again in December—an awkward reminder that trade balances are not a morality play where punishing imports automatically conjures exports.

That export weakness is the under-discussed channel. Tariffs don’t just deter imports; they raise costs for US exporters who rely on imported components, and they invite retaliation. When a midsized manufacturer pays more for parts, it becomes less competitive abroad. The result can be fewer exports—exactly what the December data suggest—while consumers and downstream businesses absorb higher costs at home.

Proponents often respond that the goal is industrial policy, not accounting aesthetics. Fine. But then admit the mechanism: tariffs are a state-imposed wedge that reallocates resources by coercion, not by productivity. They reward firms best at lobbying for exemptions, classifying products creatively, or shifting sourcing to politically blessed jurisdictions. The JPMorganChase Institute’s finding that midsized firms are paying sharply more is what “reindustrialization” looks like: a compliance-heavy tax on the non-oligopoly layer of the economy.

The political genius of tariffs is that they are both visible and deniable. They show up at the border as “tariff payments,” yet officials can insist they are making someone else pay. The invoices, it turns out, have US names on them.