Fed Governor Stephen Miran says the economic impact of Trump’s tariffs has been “quite muted” and argues foreign subsidiaries—not American households—are absorbing the costs, even as research points to rising consumer burden
Federal Reserve Governor Stephen Miran on Monday mounted a defence of President Donald Trump’s tariff policy, arguing that the economic fallout has been far more benign than widely feared and that foreign firms—not American consumers—are primarily absorbing the costs.
Speaking at Boston University’s Questrom School of Business, Miran said the dire warnings that accompanied the start of Trump’s second term—particularly around the impact of sweeping import tax hikes—have not materialised.
“I think the world has been coming in my direction on a number of issues,” Miran said, referring to concerns that tariffs would damage growth and stoke inflation. A year into the administration’s renewed trade push, he argued, the economic impact has been “quite muted.”
His remarks, however, stand in contrast to a growing body of data and research suggesting that US households are shouldering much of the burden through higher prices.
Who pays for tariffs?
Miran pushed back against the view that Americans bear most of the cost.
In official trade data, he argued, the burden appears to fall on US entities because the importers of record are often American subsidiaries. But many of these are owned by foreign parent companies, meaning the effective hit is borne overseas.
“It looks like a US entity is bearing the burden, but it’s actually just the US subsidiary of a foreign company,” Miran said. “It’s entirely inappropriate to conclude from those data that US agents are bearing the burden of the tariff.”
That interpretation diverges from several independent analyses. The Yale Budget Lab estimated in a report late last month that tariffs are costing the median US household roughly $1,400 annually.
Even Trump has previously acknowledged some domestic pain. Late last year, he conceded that Americans “might be paying something,” while maintaining that the broader economic benefits outweighed the costs.
Inflation and the Fed’s stance
The Federal Reserve has noted that tariffs have contributed to inflation running above its 2 per cent target this year.
Miran echoed that more measured assessment, indicating that fears of sustained price pressures had been overstated.
Appointed by Trump last year to fill an unexpected vacancy on the Fed’s Board of Governors, Miran previously served as a top economic adviser in the administration. Until recently, he was controversially on leave from the White House while serving at the central bank, raising questions about the optics of political proximity.
Fiscal boost and legal cloud
Beyond the inflation debate, Miran argued that tariffs, combined with other policy changes, are helping improve the long-run fiscal outlook.
“Tariff revenues are going to be significant in terms of reducing the primary deficit,” he said, framing the levies as a tool not only of trade policy but also of fiscal consolidation.
The policy’s future, however, remains uncertain. The legality of several of Trump’s tariff measures is under review by the US Supreme Court. A ruling against the administration could dismantle key elements of the trade regime. Trump has warned that such a decision would be a disaster for the US economy.
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