YOU Pay the Tariffs? Nope.

Last night's "news" brought triumphant squawks from the Coiffed Ones that 'US consumers are paying the cost of tariffs according to a [Kiel] study.'

Well, that 'study' has major flaws which the Coiffed Ones will not mention.

...Their key finding is a coefficient of −0.039, with a standard error of 0.024, significant only at the 10 percent level. For non-statisticians: this means the estimate is quite noisy. With 25.6 million observations in their dataset, achieving only marginal statistical significance suggests enormous underlying variation in the data. ...

 ...The deeper flaw lies in what happens when tariffs reduce imports, which is exactly what the study says occurred. The authors report import values and volumes fell by roughly 28-33 percent. This is where their methodology breaks down....

That's because exporters stopped selling the low-priced goods.  Why?  Because they could not take the hit to margins required by both maintaining their low price AND paying the tariffs.

 Finally:

...the Kiel data only goes to HS6, a much broader category that might simply be “frozen beef.” In short, they are measuring tariffs with a ruler and prices with a yardstick.

This means when the authors assign a tariff rate to their data, they’re using an average across products that actually face quite different tariffs. Some sub-products within “frozen beef” might face 50 percent tariffs while others face 10 percent. The mismatch means their tariff variable is measured with error.

The consequence is predictable: when your key independent variable is noisy, statistical results get biased toward finding no effect. And “no effect” of tariffs on unit values is exactly what the authors interpret as “full pass-through to Americans.”  ...

So are YOU paying the tariffs?

Not nearly as much as the Coiffed Ones want you to believe.  Not even close.