Global: Fed’s Miran argues tariff impact on Americans has been limited

Federal Reserve Governor Stephen Miran has said recent data suggests US consumers have been largely shielded from the worst effects of the Trump administration’s trade tariffs, arguing that foreign firms—not American households—are bearing most of the cost.

Speaking on Monday at the Boston University Questrom School of Business, Miran said fears that a surge in import tariffs would significantly harm the US economy have not materialised. According to him, the economic impact of the measures has been “quite muted,” prompting a gradual shift in opinion among economists who were initially sceptical.

“I think very gradually over time, many experts have been moving in my direction,” Miran said, referring to the view that tariffs have had a limited effect on growth and inflation.

Miran pushed back against the dominant economic argument that tariffs are ultimately paid by Americans through higher prices. Instead, he maintained that exporters and foreign companies have absorbed much of the burden through reduced profit margins—a position that was central to the Trump administration’s trade strategy.

That stance contrasts with broader evidence suggesting US households shoulder most tariff costs. Research from the Yale Budget Lab estimates that tariffs amount to an annual median cost of about $1,400 per household. The Federal Reserve has also acknowledged that tariffs have contributed to inflation running above its 2 per cent target this year, even as officials note the effects appear more subdued than initially expected and may represent a one-off price level adjustment rather than sustained inflation.

Addressing the data, Miran argued that accounting structures can obscure who truly pays the cost. In some cases, he said, the burden appears to fall on US entities that are actually subsidiaries of foreign firms.

“It’s entirely inappropriate to conclude from those data that US agents are bearing the burden of the tariff,” he said, noting that ownership structures matter when assessing who ultimately absorbs the cost.

Miran, a former senior economic adviser to President Donald Trump, joined the Federal Reserve Board last year after an unexpected vacancy. His appointment followed a period of controversy in which he remained on leave from the White House while serving at the central bank.

Beyond inflation and prices, Miran said tariffs—combined with other policy changes—could improve the government’s long-term fiscal position. He argued that tariff revenues would play a meaningful role in narrowing the primary deficit.

Meanwhile, the legal basis for the tariffs remains uncertain. The Supreme Court is currently reviewing their legality, a process that could result in the measures being overturned. President Trump has warned that such a ruling would be “a disaster” for the US economy.