U.S. tariffs have generated an extra $20 billion in revenue each of the last two months, totaling $240 billion this year. However, it remains unclear who is footing the bill. Motor vehicles account for over 14% of total tariff revenue, with vehicle parts and lithium-ion electric vehicle batteries also contributing significantly.
Automakers like General Motors (GM) are feeling the pinch, with GM disclosing $1.1 billion in tariff costs for the second quarter. European automaker Volkswagen reported a $1.5 billion tariff hit, citing fallout from President Trump’s trade war.
The key to understanding who pays tariffs lies in supply and demand dynamics. Weak consumer demand means less pricing power, forcing companies to absorb costs or risk losing customers. Exporters of complex goods, such as machines, have more flexibility to shift supply chains, often passing on tariff costs to retailers.
Investors need clarity on this issue to gauge which companies will see profits squeezed or protected. As prices are set annually, the full effect may not be clear until next year. The impact of tariffs on the economy is likely to be felt over time, with accumulated revenue eventually becoming a large number.
Source: https://www.axios.com/2025/07/28/tariff-revenue-investors-automakers