96% of the tariff costs are borne by the United States, draining liquidity and causing stagnation in the cryptocurrency market

The Kiel Institute for the World Economy's research shows that during the period from January 2024 to November 2025, 96% of the costs of U.S. tariffs will be borne by American consumers and importers, while foreign exporters will only bear 4%. Nearly $200 billion in tariff revenue will be almost entirely paid by domestic sources in the U.S.

The research challenges the political narrative that tariffs are paid by foreign producers. In reality, foreign exporters maintain stable prices but reduce shipment volumes, with costs passed on to U.S. importers at the border. Only about 20% of the tariff costs are transmitted to consumer prices within six months, while the rest is absorbed by importers and retailers, squeezing profit margins.

Moreover, tariffs slowly drain disposable liquidity, reducing the funds available for consumers and businesses to speculate on assets, leading to a liquidity stagnation in the cryptocurrency market since October, with neither a collapse nor an increase.