Rising U.S. tariff revenue is coinciding with a drop in corporate tax payments, suggesting companies may be absorbing tariff costs rather than passing them to consumers. A decline in June tax payments relative to 2024 appears consistent with tariff revenue collected and the 21% U.S. corporate tax rate. While we still expect some costs to be passed to consumers over time, companies absorbing more of the burden could curb inflation and make it easier for the Federal Reserve to cut rates this year.
