Politics
Tariffs paid by midsized US firms tripled last year, new study shows
WASHINGTON (AP) — Tariffs paid by midsize U.S. businesses tripled over the course of past year, new research tied to one of America’s leading banks showed on Thursday — more evidence that President Donald Trump ‘s push to charge higher taxes on imports is causing economic disruption.
The additional taxes have meant that companies that employ a combined 48 million people in the U.S. — the kinds of businesses that Trump had promised to revive — have had to find ways to absorb the new expenseby passing it along to customers in the form of higher prices, employing fewer workers or accepting lower profits.
“That’s a big change in their cost of doing business,” said Chi Mac, business research director of the JPMorganChase Institute, which published the analysis Thursday. “We also see some indications that they may be shifting away from transacting with China and maybe toward some other regions in Asia.”
The research does not say how the additional costs are flowing through the economy, but it indicates that tariffs are being paid by U.S. companies. The study is part of a growing body of economic analyses that counter the administration’s claims that foreigners pay the tariffs.
The JPMorganChase Institute report used payments data to look at businesses that might lack the pricing power of large multinational companies to offset tariffs, but may be small enough to quickly change supply chains to minimize exposure to the tax increases. The companies tended to have revenues between $10 million and $1 billion with fewer than 500 employees, a category known as “middle market.”
AP AUDIO: Tariffs paid by midsize US companies tripled last year, a JPMorganChase Institute study shows
AP’s Lisa Dwyer reports on research showing Tariffs are hitting the bottom line.
The analysis suggests that the Trump administration’s goal of becoming less directly reliant on Chinese manufacturers has been occurring. Payments to China by these companies were 20% below their October 2024 levels, but it’s unclear whether that means China is simply routing its goods through other countries or if supply chains have moved.
The authors of the analysis emphasized in an interview that companies are still adjusting to the tariffs and said they plan to continue studying the issue.
White House spokesman Kush Desai called the analysis “pointless” and said it didn’t “change the fact that President Trump was right.” The study showed that U.S. companies are paying tariffs that the president had previously claimed would be paid by foreign entities.
Trump defended his tariffs during a trip to Georgia on Thursday while touring Coosa Steel, a company involved in steel processing and distribution. The president said he couldn’t believe the Supreme Court would soon decide on the legality of some of his tariffs, given his belief that the taxes were helping U.S. manufacturers.
“The tariffs are the greatest thing to happen to this country,” Trump said.
The president imposed a series of tariffs last year for the ostensible goal of reducing the U.S. trade imbalance with other countries, so that America was not longer importing more than it exports. But trade data published Thursday by the Census Bureau showed that the trade deficit climbed last year by $25.5 billion to $1.24 trillion. The president on Wednesday posted on social media that he expected there would be a trade surplus “during this year.”
The Trump administration has been adamant that the tariffs are a boon for the economy, businesses, and workers. Kevin Hassett, director of the White House National Economic Council, lashed out on Wednesday at research by the New York Federal Reserve showing that nearly 90% of the burden for Trump’s tariffs fell on U.S. companies and consumers.
“The paper is an embarrassment,” Hassett told CNBC. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined.”
Trump increased the average tariff rate to 13% from 2.6% last year, according to the New York Fed researchers. He declared that tariffs on some items such as steel, kitchen cabinets and bathroom vanities were in the national security interest of the country. He also declared an economic emergency to bypass Congress and impose a baseline tax on goods from much of the world in April 2025 at an event he called “Liberation Day.”
The high rates provoked a financial market panic, prompting Trump to walk back his rates and then engage in talks with multiple countries that led to a set of new trade frameworks. The Supreme Court is expected to rule soon on whether Trump surpassed his legal authority by declaring an economic emergency.
Trump was elected in 2024 on his promise to tame inflation, but his tariffs have contributed to voter frustration over affordability. While inflation has not spiked during Trump’s term thus far, hiring slowed sharply and a team of academic economists estimate that consumer prices were roughly 0.8 percentage points higher than they would otherwise be.
AUSTIN — Democrats’ vision of a blue Texas is finally here.
James Talarico has been elected a U.S. senator and Gina Hinojosa as governor, the first Democrats to win either office in more than a generation. The four other statewide candidates are leading as ballots continue to be counted. Democrats further down the ballot are leading some red districts, changing the complexion of the state legislature, congressional delegation and courts.
“It’s something that I haven’t seen in decades, that none of us have seen in decades,” said former Texas House Speaker Joe Straus, a moderate Republican.
It’s an outcome that even the most bullish Democrats didn’t dare enunciate in the late days of the election. But as results have poured in Tuesday night, the party is outpacing its expectations across the country’s second most populous state amidst a national romp.
Both Hinojosa’s and Talarico’s victory margins came by running up vote counts in Texas’ deep-blue urban centers and while also leading in the largest Republican-led county in the country, Tarrant County. They reversed Republican gains across the Latino-heavy Rio Grande Valley region, an ancestrally Democratic area that had swung hard to the right in recent years. Democratic Rep. Vicente Gonzalez romped to a near-20 point victory in a seat Republicans drew to favor them during last year’s redrawing of the state’s House map, ousting a top Republican recruit who campaigned alongside Speaker Mike Johnson to begin election day.
It amounts to a set of remarkable results in a state that hasn’t elected a Democrat to the U.S. Senate since 1988 and to the governor’s mansion since 1990. In recent cycles, Democrats have tried and failed to flip the state in presidential and U.S. Senate contests but have been largely uncompetitive for state offices. But Tuesday’s blue wave slammed into Texas particularly hard, as it combined frustrations over the economy, immigration enforcement, data centers and corruption with a collapse of Trump’s 2024 coalition.
“We reminded voters that Republicans have been in charge in Texas for 30 years. That every problem we have, was caused by Republicans,” Michelle Lowe Solis, chair of the Bexar County Democratic Party. “They aren’t going to fix the problems, they caused them.”
As votes continue to be counted, Democrats appear poised to blunt the impact of Republicans’ attempted gerrymander, likely sweeping the Rio Grande Valley congressional seats while holding onto another San Antonio-area district drawn to favor Republicans. In state Supreme Court races, they lead in all four seats up for grabs, potentially turning a 9-0 conservative majority into a 5-4 split. Among the first 36 state house races called by the Associated Press, 34 have gone to Democrats and just two to Republicans.“Voters aren’t dumb,” said Rep. Linda Sanchez (D-Calif.), who chairs the Congressional Hispanic Caucus’ BOLD PAC. “Even though the Republicans have tried to cheat with the series of gerrymanders, that has, I think, only made voters in those areas more willing to participate.”
Talarico’s and Hinojosa’s victories will be felt nationally. Texas Democrats, who have long asked for national money and resources in a state where elections are costly, now have a test case of how to win. And it will bolster their arguments that their state, with 40 electoral votes, should be treated as a presidential battleground.
Ali Bianco and Jonathan Martin contributed reporting.
Just a few hours into election night, Republicans acknowledged what appeared to be a historic midterm defeat — a long-feared “blue wave” that had started washing across the nation.
The extent of the washout became clear soon after polls closed: Republicans lost a South Carolina Senate seat for the first time in nearly 30 years. Democrats nipped on the heels of House incumbents in deep red Florida districts. And the man in charge of the party’s House reelection effort was at grave risk of losing his own seat.
By 10 p.m., Democrats had already flipped three GOP House seats — itself enough to win a majority if Republicans can’t make gains elsewhere — and many in the party feared dozens more could follow as voters registered their dissatisfaction with President Donald Trump.
Voters in Texas, a ruby-red state for a generation, appeared at risk of handing multiple statewide races to Republicans and possible control of the legislature. Joe Straus, a former state House speaker, cast it as a historic rebuke of an unpopular president.
“President Trump hasn’t exactly done any Republicans favors across the country,” he said on a Blue Light News election night broadcast. “They haven’t done themselves favors, frankly, by following so closely along.”
Many of the political professionals charged with getting GOP candidates elected in this environment said the results could be potentially historic in nature.
“We are looking at tsunami territory,” said one national Republican operative who, like others, was granted anonymity to candidly describe the returns.
“This is the worst electoral defeat in my lifetime and likely in history,” said another GOP operative working on battleground races. “Trump said his name and record was on the ballot and people responded — resoundingly.”
At an ill-fated victory party for Senate candidate Michael Whatley in North Carolina, staff were already packing up the room less than two hours after polls closed. Returns showed Democrat Roy Cooper on track to win by as many as 20 points in a race that was supposed to have been tooth-and-nail.
Standing in the room, one North Carolina Republican openly pondered what many others in the party had long avoided saying openly — that it was finally time to think about life after Trump.
“Trump has done some excellent things, and I appreciate that. But it can’t be the party of Trump forever,” said Jonathan Fletcher, a former GOP county chair. “If the Republican Party is going to be serious about winning, we have to be serious about winning people in the middle.”
Nearly every state, district and county shows movement toward Democrats, from counties that Trump won three times to blue strongholds where Democrats are improving their margins. County-level data shows Democrats doing on average more than 5 points better than Kamala Harris did in the 2024 presidential race.
That suggests that districts Trump won by double digits just two years ago are in reach for Democrats.
The losses threatened to pile up even after Republican candidates, committees and super PACs spent massive sums in an effort to retain control of Congress — including more than $380 million from President Donald Trump’s political operation.
“I can’t believe how these House races aren’t close given the amount spent,” a senior Senate GOP operative said. Another senior Senate GOP official called it a “bloodbath.”
Many of the Republicans said the war in Iran, which sent voters’ gas prices soaring, and continued frustration with the economy drove frustration with a party that won on those same issues in 2024.
On top of that some quickly vented about substandard candidates — such as Darline Graham in the South Carolina Senate race and Ken Paxton in the Texas Senate contest.
“Not only were folks upset about the war, inflation and gas prices, but add to that the fact they think he was making them eat a shit sandwich in Darline, and they just had enough,” said Mick Mulvaney, a former Trump White House chief of staff and South Carolina congressman.
Trump said on Truth Social his own absence from the ballot for the drastic Republican underperformance — even after barnstorming the country begging Republicans to “vote like I’m on the ballot.”
“I wasn’t on the Ballot and if I was, we would have won IN A LANDSLIDE!” Trump posted shortly after 10:30 p.m.
Other Republicans were ready to blame Trump’s own decisions.
“Republicans got their asses kicked tonight because of the Iran war — plain and simple. Everything else is just noise and spin,” said a person close to the White House.
Meanwhile, power in Washington was already shifting. The likely next chair of the House Oversight Committee, who has been gearing up for massive probes into the Trump administration, issued a two-word statement Tuesday addressed to administration officials and the “Trump Crime Family.”
“Lawyer up,” Rep. Robert Garcia of California said.
Will Steakin, Erin Doherty, Lauren Fedor, Ashley Ahn and Lisa Kashinsky contributed to this report.
Joe Biden was unceremoniously ushered out of the White House two years ago.
On Tuesday, he got a small measure of revenge.
Prominent Biden administration alumni are winning in a handful of notable races, with Keisha Lance Bottoms — the one-time Atlanta mayor turned Biden’s senior adviser and director of the Office of Public Engagement — leading the pack by flipping Georgia’s governorship.
The victories, his former staffers say, are an important part of rehabilitating his legacy within a Democratic Party that all but banished him in 2024.
“It’s proof that President Biden assembled a talented team of public servants — who the public is calling on now to help turn this country around,” said Ron Klain, Biden’s former chief of staff. “These fantastic men and women will make life more affordable, health care more available, protect our rights, fight corruption, and make our country stronger.”
Biden was not a regular on the trail this year, and most Democrats kept their distance from the former president. But he did weigh in on a handful of primaries, helping put loyal lieutenants in front of voters who still held him in high regard.
While Bottoms was the highest profile victory, there’s a number of Biden alumni also poised to head to Washington. Gabe Amo, who won a 2023 special election in a blue Rhode Island seat, secured his first full term in Congress. And Dan Koh, who won Massachusetts’ 6th District to succeed Rep. Seth Moulton, was Biden’s deputy Cabinet secretary and deputy director of the White House Office of Intergovernmental Affairs.
He leaned into his Biden endorsement throughout the campaign and this week reposted a video of a phone call he and his family had with Joe and Jill Biden on primary night in September.
“Mr. President and Madame first lady, thank you so much for all of your support,” he told them. “It wouldn’t have been possible without both of you. … You changed my life by giving me a job of a lifetime. And you got my back the minute I decided to run.”
Biden’s Cabinet also had a strong night in other governor races. Xavier Becerra, Biden’s secretary of Health and Human Services, had a solid polling lead over Republican Steve Hilton in the race to be California’s next governor going into Tuesday. And, Deb Haaland, Biden’s Interior secretary, was projected to win the New Mexico governor race.
“In his farewell speech, President Biden warned that ‘an oligarchy is taking shape in America of extreme wealth, power, and influence that literally threatens our entire democracy,’” said Andrew Bates, the former president’s longtime spokesperson. “He urged his team and supporters to keep standing up for the values that we all care about, including decency, hard work, and a sense of national community. On the ballot and off, a whole lot of his alumni are fighting to carry on that legacy.”
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