Economic expert demolishes Trump's demand for companies to 'eat the tariffs'

President Donald Trump is demanding that U.S. companies pay the entirety of his tariffs rather than raise prices and pass them to consumers — but even if they fully complied with Trump's orders, that doesn't actually make his tariffs any better of a situation for the economy, wrote a prominent tax policy expert on Tuesday.

As Republican lawmakers and entrepreneurs alike sound the alarm that the tariffs will stifle economic growth and supercharge inflation, Trump has picked fights with any company that suggests price hikes might be necessary, most notably demanding that Walmart "eat the tariffs" in response to reports they may raise prices on some items.

But in a series of posts on X this week, Erica D. York, vice president of tax policy for the conservative-leaning Tax Foundation, pointed out that forcing an American corporation to pay tariffs fundamentally comes to the same thing as forcing their customers to pay it.

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"Here’s what 'eat the tariffs' looks like in the real world," wrote York, posting an excerpt from a story detailing a small business, Jeans Day Apparel, selling clothing in McCordsville, Indiana. This company faced a 3 percent increase in cost for supplies due to the tariffs, and they kept their prices the same — but that meant laying off the high schoolers they were paying part-time at $12-15 an hour to help them make their clothing.

When a commenter replied to her by saying, "You literally proved that overwhelming majority of the tariff was eaten and they didn’t pass anything to the consumer," York had a ready response on Tuesday.

"It's interesting that people seem to think 'eat the tariff' means it has no ill effect," she said, posting more supplemental material. "Eat the tariff means lower incomes. Pass the tariff means lower incomes. No matter which channel tariffs take, the result is a reduction in real, after-tax incomes."