Trump-era tariffs continue to fuel consumer price inflation
A New York Federal Reserve study finds Trump-era tariffs added 2.9 percentage points to consumer goods prices as of February.
Trump-era tariffs directly increased consumer prices for everyday goods by 2.9 percentage points as of February. The cost of 67 categories of goods was 2.9 percentage points higher due to those tariffs, according to a new study from the New York Federal Reserve. Without the tariffs, prices for the studied products would have declined by almost 1%.
Price effects linger through supply chains and delayed pass-through
For each percentage point increase in average tariff, consumer goods prices were higher by roughly a quarter of a percent a year later. Roughly two-thirds of the tariff-related price impact came directly from the levies. The rest stemmed from knock-on effects like U.S. companies using more expensive imported parts. Around 26% of last year's tariff increases ended up trickling into higher prices. The researchers noted that two-thirds of the price hike could be explained by rising import prices. One-third of the price hike on domestic products was less direct, involving higher costs of imported parts or price matching with higher profit margins.
Mary Amiti, Sebastian Heise and David Weinstein said: "Tariffs have a larger and more drawn-out impact on consumer prices than the direct effect alone would suggest."
Court rulings and policy shifts fail to halt inflationary trajectory
The Supreme Court struck down many of Trump's tariffs in February, resulting in billions of dollars in refunds to retailers. The White House has vowed to push forward with levies through alternative measures. Annual price growth in the tracked goods peaked at the start of 2026. Had the tariffs not been imposed, price inflation for consumer goods would have likely decreased. Instead, inflation in the category likely peaked near 3 percent in February 2026. Consumers are expected to pay raised prices into 2027 due to the tariff policy.
Current tariff levels and exporter behavior shape ongoing impact
Products imported from many countries now often face tariffs of about 10%. This rate is significantly less than under the earlier round of tariffs. Foreign exporters lowered their prices very little. Nearly 90 percent of the 2025 tariffs were passed through to U.S. import prices. A research paper published by the New York Federal Reserve this week concluded tariffs are very clearly inflationary, driving up prices on imported goods and U.S.-made goods.
Research confirms inflationary role of tariffs across goods
The study was conducted by a team of researchers at the New York Federal Reserve. The three authors of the study are Mary Amiti, Sebastian Heise, and David Weinstein. President Donald Trump has long claimed that exporters would eat the cost of tariffs by lowering their prices. White House spokeswoman Taylor Rogers made a statement to CNBC about tariff costs being borne by foreign exporters. The research confirms the inflationary role of tariffs across goods. Consumers are expected to pay raised prices into 2027 due to the tariff policy.
