Fed Data Shows Tariffs Drove Inflation in 2025
Tariffs raised prices for 67 U.S. goods by 2.9 percentage points in 2025.
In brief
Tariffs raised prices for 67 U.S. goods by 2.9 percentage points in 2025. U.S. tariffs increased prices for 67 categories of goods by 2.9 percentage points in 2025, with indirect effects on domestic production taking a year to fully materialize. Originally reported by Pymnts.
Fed Data Shows Tariffs Drove Inflation
New research shows U.S. tariffs increased the cost of 67 consumer goods by 2.9 percentage points in 2025.
“Importantly, tariffs also raise the prices of goods that are not directly taxed: goods made in the U.S. account for about a third of the total effect”
Tariffs Impact on Prices
Prices for these goods would have dropped by nearly 1% without tariffs, with indirect effects taking a year to fully materialize.
“This indirect effect takes longer to materialize than the direct effect on imported goods, so the full effect of a tariff takes about a year to appear.”
Supreme Court Ruling on Tariffs
The Supreme Court ruled in February that many White House tariffs were illegal, leading to billions in refunds for retailers.
Retailers Use Refunds to Lower Prices
Walmart, Tractor Supply, e.l.f. Beauty and Burlington announced plans to lower prices using tariff refunds.
“It feels like the right thing to do for our customers”
Consumer Concerns Shift
American consumers are less worried about job losses but more concerned about prices and household finances in late 2026.
What matters most
U.S. tariffs increased prices for 67 categories of goods by 2.9 percentage points in 2025, with indirect effects on domestic production taking a year to fully materialize.
