Kevin Hassett, director of the National Economic Council of the United States, said Wednesday that Federal Reserve researchers who found that President Donald Trump’s tariffs hit Americans hardest should face discipline over the analysis.
“It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system,” Hassett told CNBC.
Federal Reserve Bank of New York’s researchers Mary Amiti, Christopher Flanagan, Sebastian Heise and David Weinstein, an economics professor at Columbia University, wrote the paper.
“U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025,” according to the report from the Federal Reserve Bank of New York.
Hassett said the paper failed to make the grade.
“The people associated with this paper should presumably be disciplined, because what they’ve done is they’ve put out a conclusion, which has created a lot of news that’s highly partisan based on analysis that wouldn’t be accepted in a first-semester econ class,” Hassett said.
Phillip Magness, a senior fellow at the Independent Institute, said the Federal Reserve analysis was in line with similar studies.
“The New York Fed analysis is consistent with multiple other empirical studies into the effects of Trump’s tariff policies,” he told The Center Square. “The Fed report found that about 90% of tariff incidence is passed through onto American consumers and businesses. This finding is in line with several other independent studies.”
The Kiel Institute for the World Economy found that Americans are paying almost the entire cost of tariffs. A National Bureau of Economic Research paper found that nearly the entire tariff burden is passed on in the form of higher prices, directly impacting American businesses and consumers.
Similarly, a December 2025 study from Duke’s Department of Economics found that during the 2019–21 trade dispute, consumers ultimately paid more than the tariff cost on European wines. Goldman Sachs economists projected in October that American consumers will pay 55% of the tariff costs, U.S. businesses will pay 22% and foreign exporters will pay 18%.
Magness said no research has surfaced showing that foreign businesses are significantly cutting prices.
“I have not seen any credible study that supports the White House’s claims about foreign firms incurring the bulk of tariff incidence,” he said.
However, in November, the Congressional Budget Office changed some of its tariff projections after noting that foreign businesses were picking up about 5% of the cost of the tariffs through lower prices.
Magness said Hassett’s comments could have a chilling effect on research that doesn’t match White House talking points.
“Hassett’s comments about […] the New York Fed researchers are a serious breach of professional and scholarly ethics,” he said. “[Hassett] is sending a signal that the White House will attempt to punish professional economists who publish empirical findings that contradict the administration’s unsubstantiated claims about the benefits of tariffs.”
Peter Navarro, a top trade adviser to Trump, has said it is about bargaining power: “In real markets, the burden falls on whoever can’t afford to lose access to the U.S. consumer.” The White House has said foreign exporters who depend on access to the American economy will ultimately pay the cost of the tariffs.
Trump has made tariffs a central part of his economic agenda during his second term. In April 2025, Trump imposed import taxes of at least 10% on every U.S. trading partner. Since then, the president has suspended, changed, increased, decreased, and reimposed tariffs under the 1977 International Emergency Economic Powers Act.
A group of states and small businesses challenged Trump’s tariffs under the 1977 law, winning in two lower courts before the administration appealed to the U.S. Supreme Court. The high court agreed to hear the case on an expedited basis.
