Key Points
- Tariffs imposed by President Trump raised consumer goods prices by 2.9% as of February 2026, according to a New York Fed study.
- The study found that tariffs directly raised the cost of imported goods, with indirect effects reaching consumers through supply chains and input costs.
- Prices are projected to rise again by mid-2027, driven by tariffs on Canadian goods and a planned increase on Canadian automobiles.
The Impact of Trump Tariffs on Consumer Prices
The New York Fed study found that tariffs imposed by President Trump raised consumer goods prices by 2.9% as of February 2026. This increase is attributed to three channels: direct tariffs on imported goods, increased costs for domestic manufacturers, and reduced foreign competition.
The study also found that tariffs feed into import prices almost immediately, while their effects on goods made in the United States can take nine to twelve months to work through supply chains.
At a Glance
| Tariff Contribution to Consumer Goods Price Level | 2.9% Peak effect as of February 2026 |
| Tariff Pass-Through Rate | 26% Percentage of tariff increase ultimately reaching consumer goods prices |
| Tariff Impact on Import Prices | 90% Percentage of tariff showing up in higher import prices |
Behind the Numbers: Tariff Pass-Through into Consumer Prices
Behind the Numbers: Tariff Pass-Through into Consumer Prices
The study's key finding is that tariffs directly raised the cost of imported goods, with a pass-through rate of 26% ultimately reaching consumer goods prices. This means that for every 1% increase in tariffs, consumer goods prices rise by 0.26%.
The researchers also found that tariffs on Canadian goods and a planned increase on Canadian automobiles will drive price inflation again by mid-2027.
Preparing for Tariff-Driven Inflation in 2027
Preparing for Tariff-Driven Inflation in 2027
Businesses and consumers should prepare for potential price increases driven by tariffs on Canadian goods and a planned increase on Canadian automobiles by mid-2027.
Key metrics to watch include the 12-month goods price inflation rate and the impact of tariffs on import prices.
Risk & Opportunity Assessment
| Commercial Risk | Medium | Tariffs on Canadian goods and a planned increase on Canadian automobiles will drive price inflation again by mid-2027 |
| Regulatory Risk | Medium | The study's findings highlight the potential for tariffs to impact consumer goods prices and inflation rates |
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