Who Really pays tariffs? Stanford economist breaks down the hidden consumer cost

In this episode of The Greener Way, host Michelle Baltazar speaks with Stanford University economist Luke Heeney about the often-overlooked social impacts of industrial policy, focusing on the 2025 US tariffs and their effects on the automotive sector.

Heeney explains why accounting for tariffs on intermediate inputs is crucial, finding that many US producers lose billions when parts are included, with only one company coming out ahead due to greater domestic sourcing.

He also finds the largest percentage of financial losses fall on the lowest-income households, costing billions of dollars.

00:00 Who pays tariffs?

00:58 Industrial policy focus

03:11 Tariffs study setup

04:30 Key findings explained

06:27 Lessons for Australia

07:37 Why impacts are overlooked

09:37 Staggering consumer costs

12:04 Building better toolkits

14:27 What the government can do

We record on Gadigal land and we pay our respects to the traditional custodians of country and elders past and present.

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