If it weren’t for President Donald Trump’s tariffs, Americans would have experienced lower prices on numerous everyday items.
According to a new paper from the New York Federal Reserve, tariffs were the primary driver of inflation for many common consumer goods early this year and throughout most of 2025.
Federal Reserve economists analyzed how tariffs affected the prices of 67 common consumer goods, using 2022 consumer spending data as a weighting factor. The researchers estimated that without tariffs, these goods would have seen price declines for most of last year and through early 2026, with a drop of about 1 percentage point in January and February.
Meanwhile, tariffs’ contribution to goods inflation increased for most of this period. The researchers reported that the impact of tariffs on consumer prices reached its peak in February of this year, at approximately 3 percentage points.
Consumer goods inflation cannot be directly compared to the overall inflation rate, as it excludes service prices like rent. It also does not account for energy inflation, such as gas and fuel prices, which have risen sharply since the start of the Iran war. Nonetheless, it accurately reflects the price pressures Americans face in most stores, covering expenses from groceries to clothing to electronics.
The central bank wrote in a note this week that goods price inflation was near its slightly negative pre-COVID average for most of 2024 and started to rise toward the end of that year, before new tariffs were implemented. It then continued to increase throughout 2025, with our estimates attributing this rise to the tariffs.
Fed researchers added that the impact of tariffs on consumer goods typically takes about a year to become evident, citing the ‘indirect effect’ of tariffs increasing the cost of imported inputs, which eventually leads producers to raise prices.
As a result, the paper concluded, tariffs have a larger and more prolonged impact on consumer prices than the direct effect alone would indicate.
The paper estimated that the total impact of tariffs on goods prices likely dropped to zero by August, approximately six months after the Supreme Court struck down Trump’s IEEPA tariffs.
Inflation has been a major concern for markets this year, primarily due to the recent surge in oil prices amid the Iran war. Economists have warned that rising energy costs could fuel inflation in other sectors of the economy. Consumer price growth remained steady at 3.4% year-over-year in August, and investors are now awaiting the September inflation report on October 14.
The White House did not immediately respond to a request for comment sent by Themoneytimes.