The impact of tariffs on inflation is gradually becoming apparent? US import prices rose by the largest margin in a year.

The White House maintains that tariffs have not increased US inflation, but a series of economic data released this week may challenge this claim. Data released by the Bureau of Labor Statistics (BLS) on Friday showed that import prices rose by 0.4% in July, the largest increase in over a year, driven mainly by rising commodity costs. Although this index does not include the additional costs of tariffs added at the import stage, the data suggests that exporters have not proactively lowered prices to offset the tariff burden on US importers. Earlier this week, Stephen Miran, a nominee for the Federal Reserve Board nominated by President Trump, stated in an interview that he "wholly did not see any evidence of tariffs triggering inflation." This statement is in line with Trump's own views that tariffs have not caused inflation or other problems for the US, but have instead brought in significant revenue for the Treasury. However, recent data has gradually shown the impact of tariffs on prices. The Producer Price Index (PPI) for July, released on Thursday, showed a significant increase in the costs of goods and services, raising concerns about inflation and weakening the strong summer rally of the S&P 500 index. At the same time, data from the US Department of Commerce showed that retail and food service sales in July increased by 0.5% to $726.3 billion, but this data did not factor out inflation, meaning that the increase includes both increased consumption and increased prices. From the breakdown of the data, clothing sales, which are highly related to Asian supply chains and sensitive to tariffs, increased by 7.4% compared to the previous year, while spending on food and beverage services decreased by 0.4%, reflecting a trend of caution among consumers in discretionary spending. Jeffery Roach, Chief Economist at LPL Financial, pointed out that investors should pay attention to optional consumer spending such as car sales and dining to assess whether consumer momentum is slowing down in the future. The University of Michigan's Consumer Confidence Index for August dropped to a three-month low, with both one-year and five-year inflation expectations significantly increasing. Paul Ashworth, Chief North America Economist at Capital Economics, said this indicates that American households remain highly cautious about rising inflation, especially after the latest round of tariff retaliation measures by the Trump administration. Samuel Tombs, Chief US Economist at Pantheon Macroeconomics, warned that although retail sales data remains robust, a weak job market combined with rising commodity prices driven by tariffs suggests that real household income in the US may be stagnant. According to estimates by the Leuthold Group, Trump's tariff plan announced earlier this month has raised the effective tariff rate in the US to between 18% and 19%, compared to only about 3% in August last year. BLS is expected to release data on CPI for August on September 11, which is expected to reflect some of the effects of tariffs. Chun Wang, Senior Researcher at Leuthold Group, pointed out: "Overseas sellers have not significantly lowered prices to absorb the impact of tariffs, which is not a good sign for the US CPI outlook."