Prices for consumer goods were set to fall slightly. But then came tariffs.
A new study from researchers at the Federal Reserve Bank of New York found that levies put in place last year by the Trump administration drove up consumer goods inflation by an estimated 2.9 percentage points as of February.
That disrupted a slight downward trajectory in inflation; without tariffs, “goods prices would have fallen slightly,” the researchers found.
The study estimates that “about a quarter of a tariff increase is passed through to consumer goods prices.” Tariffs added to price increases for both imported and domestic goods, it found.
President Donald Trump imposed widespread tariffs last year on imports from nearly every country. Tariffs are taxes that American businesses pay to import foreign goods and are often passed along to consumers in the form of raised prices.
Many of Trump’s tariffs were overturned by the U.S. Supreme Court earlier this year, and they were quickly replaced with another tariff on many global imports. The overturning caused the price inflation to ease by August, the study found. But more tariffs are set to take effect on Canadian autos in January.
Catch up quickly every weekday morning with a rundown of the 7 most important and interesting stories. Sign up for The 7 newsletter.
The post Tariffs drove up prices for consumer goods, study finds appeared first on Washington Post.
