Donald Trump’s declaration that tariffs on $200 billion of Chinese goods would jump to 25 percent in May gave rise to a firestorm of claims that the import taxes hurt U.S. consumers.

Recent history, however, suggests that these claims lack a basis in evidence. That’s a polite way of saying that they’re flat-out wrong.

In fact, Donald Trump’s insistence that American consumers do not suffer from tariffs is entirely borne out by the data.

Neither the tariffs placed on steel and aluminum imposed a year ago nor the more recent ten percent tariff on Chinese goods pushed prices of goods sold to consumers up. And now we have price data from May that once again indicate no tariff pricing pressure on consumers.

So who is paying for the tariffs? We know the U.S. government has collected billions in tariffs, so it is clear that someone is footing the bill. But keep in mind that when journalists and lobbyists claim, “tariffs are taxes on consumers,” this is inaccurate.

Tariffs are taxes, to be sure. But unlike a sales tax or a gas tax, consumers do not directly pay any tariffs. Tariffs are paid by importers, often large U.S. companies that are importing from their own foreign subsidiaries or foreign contractors. But businesses cannot raise their prices just because their costs or taxes go up. Sometimes they have to absorb the costs.

We have seen this recently with wages, which have been rising faster than inflation, which means costs are rising faster than prices. Conversely, the massive cut in corporate taxes enacted at the end of 2017 did not automatically translate into businesses slashing prices because their tax costs had fallen.

In addition, the Chinese currency has depreciated over the past year, which makes imports from China less expensive. And there is anecdotal evidence that Chinese manufacturers are slashing prices in an attempt to hold on to market share in the U.S. China’s government may be subsidizing this directly in some cases and in other cases supporting it by lowering the price of credit to exporting businesses.

“We have put 25 percent on $250 billion of Chinese goods coming into our country, including $50 billion of high technology equipment. You haven’t seen any, or virtually any, price increase,” President Trump said on Monday. “Because what China does is they subsidize their companies because they want to keep people working and they want to stay competitive.”

No Inflation Despite Tariffs

The most recent evidence against what trade expert Alan Tonelson calls Tariffmageddon scaremongering comes from Thursday’s release of the producer-price index, which mostly measures the prices businesses receive for their goods and services. This rose a seasonally adjusted 0.1 percent in May from a month earlier, the Labor Department said. That’s a decline in inflation since the monthly gain in April was 0.2 percent. From a year earlier, the producer-price index increased by 1.8 percent, less than April’s 2.2 percent gain and less than the 2.0 percent expected.

Take out the volatile food and energy components and prices rose 0.2 percent for the month and 2.3 percent for the year, both in line with expectations. Subtract a category called trade services, which measures the profit margin of middlemen rather than prices, and prices were up a bit higher, 0.4 percent, on a monthly basis and the same 2.3 percent on an annual basis.

To really get a look at any potential impact of tariffs, however, it’s best to look at the prices of goods less food and energy. This is more or less what economists called the “tradeable sector” of the economy. This was unchanged on a monthly basis in May. Compared with a year ago, prices were up just 1.6 percent, a slight decline from April’s 1.8 percent.

This indicates that tariffs have not had a very big impact on prices in the U.S. That should not be very surprising. The metals tariffs have led to U.S. metals producers expanding capacity, which reduces the impact of taxes on imported metals. And an additional fifteen percent tariff–taking tariffs from 10 percent to 25 percent–on $200 billion of goods in our $20.5 trillion economy amounts to a 0.15 percent tax.

When the San Francisco Federal Reserve estimated the effect of tariffs on prices, they came to the conclusion that they had had a 0.1 percent impact. But that may exaggerate the effect on consumers if businesses cannot pass on the cost of tariffs.

Durable goods, products purchased by consumers and businesses that are expected to last three-years or more, are a good place to look for signs of tariff-led inflation. The producer-price data shows that prices of raw materials used in durable goods manufacturing fell 0.4 percent in April, the second consecutive monthly decline, and are down 0.9 percent from last year. Components for durable goods, the prices of parts that go into durables, were up just 0.1 percent in May and are up 1.6 percent from a year ago.

The nondurable goods category is where we might see signs of the China tariffs. Materials prices here rose 0.8 percent in May, a reversal of two months of decline in April and March. Compared with a year ago, however, prices are down 3.5 percent. Parts rose 0.1 percent for the month and are up just 1 percent compared with a year ago.

Metals Tariffs Haven’t Raised Prices on Planes, Trains, or Automobiles

What about specific items? Still no signs of tariff price pressure. Start with products that were predicted to rise in price because of the metals tariffs. Specifically, cars and trucks.

“U.S. President Donald Trump’s steel and aluminum tariffs will boost car prices by hiking commodity costs for manufacturers, automakers have warned,” Reuters reported last year.

That has not happened. Car prices fell 0.1 percent in May and are up just 0.9 percent from a year ago. Light truck prices climbed 0.4 in May, ending three straight monthly declines, and are up 0.9 percent from a year ago. That will be some relief to automakers, to be sure. But there’s no sign of tariffs pushing prices up.

Car and truck parts? Flat in May and up just 0.6 percent from a year ago. Campers and recreational trailers? Down 0.3 percent in May and up just 1 percent from a year ago.

Seeing a pattern yet? Let’s look at some heavy duty steel and aluminum products. Aircraft prices rose 0.1 in May and are up 2.0 percent from a year ago. That’s the highest annual price hike on the list so far but it is less than the overall rise in producer prices, indicating that this is not a tariff-led price hike. It’s also very close to the Federal Reserve’s target of 2 percent inflation.

Perhaps the prices of aircraft have been held down the trouble with Boeing planes. So let’s look at the prices of ships in May: up 0.4 percent for the month and 0.9 percent annually. Railroad equipment was flat in May, for the second consecutive month, and prices are up 2.7 percent for the year. That’s a bit high but keep in mind that railroad equipment is under-pressure from rising demand for shipping in the U.S.

Some of these metals heavy items, including auto parts and ships, are actually doubly subject to tariffs because they were hit by both metals tariffs and China tariffs.

Prices for Consumer Goods Are Not Rising Due to China Tariffs

Furniture is one of the biggest categories of consumer items that were hit by the China tariffs. Household furniture prices, however, were up just 0.4 percent in May and 2.0 percent for the year.

Soaps and detergents imported from China saw their tariffs rise from 10 percent to 25 percent but prices were up just 0.1 percent in May and 0.4 percent compared with a year ago.

A lot of categories of home electronic equipment were hit with the China tariff. Prices here were flat for the previous two months and rose 0.6 percent in May. Compared with a year ago, prices are up just 1.2 percent.

Household appliances had been pushed up by a big jump in the price of washing machines following a specific tariff intended to counteract anticompetitive dumping that had depressed prices. But this has faded. In May, household appliance prices rose 0.6 percent. For the year they are up 4.4 percent.

But that price increase is offset by the fall of computer prices. Computer prices fell 2.2 percent in May and are down 4.7 percent for the year.

A lot of the materials used in textile and clothing manufacturing in the U.S. got hit with China tariffs, including man-made textiles like rayon, nylon, and polyester. Synthetic fiber prices, however, fell 1 percent in April and were flat in May. Compared with a year ago, they are up 2.5 percent for the year. Yarn, thread, and finished fabric prices rose 0.4 percent in May but are down 0.1 percent compared with a year ago. Finished fabrics fell 0.1 percent in May and are up 2.9 percent compared with a year ago.

And the tariffs on these are not pushing up prices for clothing or textile home furnishings. Women’s clothing prices rose 0.1 percent in May and are down 1.9 for the year. Men’s clothing prices rose 0.5 in the month and are up 1.8 percent for the year.

Margins Shrink But Prices Stay Low

Tariffs may have raised prices for businesses further out on the production chain but these are not getting passed on to consumers in the form of higher prices for final goods, according to the data. Most likely, businesses are absorbing the higher costs because they lack pricing power in the very-competitive user consumer market. Who wants to give up market share Jeff Bezos or Walmart by hiking prices on store shelves?

Evidence for this in the producer-price index comes from a category called “trade services.” Unlike the rest of the index, which measures prices received, trade services is a measure of mark-ups, the difference between what a retailer or wholesaler paid for inventory and what they sold it for. Margins for China-tariffed TV, video, and photographic equipment are down 9.9 percent for the year and fell 4.5 percent in May. Furniture store margins are down 0.5 percent both on a monthly and annual basis. Hardware stores, which carry a lot of newly tariffed Chinese goods, saw margins fall 2.2 percent in May for a 2.5 percent annual decline.

If you go even further out in the supply chain you can see even more evidence that the impact of metals tariffs on costs is now fading from the data and that these costs never got passed through to consumers. Prices of steel mill products, which are an intermediate good used to produce consumer goods, fell 0.6 percent in May. Prices for steel mill products also fell 1.7 percent in April, held flat in March, and fell 3.2 percent in January. On an annual basis, which now means comparing prices of products immediately after the steel tariffs and more than a year after they were imposed, prices are up just 1.1 percent.

A month ago, steel mill prices were still showing a steep 5.8 percent increase on an annual basis. In February, prices were up 12.6 percent compared with the year prior and in October they were up 18.6 percent. In other words, the tariffs are not inflationary in the ordinary sense of the word. They resulted in higher intermediate prices paid by businesses but did not create ongoing price pressure.

It’s also likely that businesses have been better able to absorb the higher prices of imported goods or tariffed metals because last year’s massive cut in the corporate tax rate gave a big boost to after-tax profits. That softens the blow of a slight compression of pre-tax margins.

The Tariff Hoax Debunked

Economists and journalists alike often assume that the price of tariffs gets passed through to consumers but neither economic theory nor data support that assumption. One other lesson from the past year’s experience with tariffs is that many economists and journalists appear to be immune to facts when it comes to the effects of tariffs, preferring to endlessly repeat the mantra that tariffs raise consumer prices.