Trump tariffs drive up US consumer costs; New York Fed: prices of affected goods rose nearly 3%, impact may last until 2027

New York Fed research shows that the tariff policies implemented by U.S. President Trump have significantly raised the cost for American consumers of buying everyday goods. Without the relevant tariffs, prices for many categories of goods would have been expected to decline from last year to early this year, but the tariffs not only offset that trend but also left consumers facing greater spending pressure. According to a report released by the New York Fed research team, as of February this year, prices for the 67 categories of consumer goods it tracked were 2.9% higher than they would have been without the tariffs. The researchers estimated that without those tariffs, prices for the relevant goods would have been expected to fall by nearly 1%. The study provides a new quantitative basis for assessing the actual impact of Trump's tariff policies on American consumers. Economists had generally expected tariffs to push up goods prices, but because policies have been repeatedly adjusted and corporate pricing mechanisms lack transparency, it has been difficult to accurately measure the extent to which tariffs are ultimately passed through to consumers. The New York Fed study found that the impact of tariffs on consumer goods prices is not only significant but also persistent. The data show that for every 1 percentage point increase in the average tariff rate, consumer goods prices rise by about 0.25% after one year. The research noted that the annual price increase for the tracked goods peaked in early 2026, but the price pressure brought by tariffs will not disappear quickly. Even if the initial price increases gradually slow, consumers may continue to bear additional costs caused by the related policies in 2027. It is worth noting that the impact of tariffs on goods prices does not come entirely from the tax burden on imported goods themselves. The New York Fed estimated that about two-thirds of the price increase effect comes directly from tariffs, while the rest stems from indirect transmission effects. For example, some U.S. companies produce final products domestically but need to import components and raw materials from overseas. When these inputs become more expensive because of tariffs, companies' production costs also rise, and this may be further reflected in the final selling prices of goods. The report's authors, Mary Amiti, Sebastian Heise and David Weinstein, pointed out that the impact of tariffs on consumer prices is larger than what would be shown by simply calculating the direct tax burden, and it lasts longer. The research team also estimated that about 26% of the 2025 tariff increases were ultimately passed through to consumer prices. This means that although part of the added costs may be borne by importers, retailers or other businesses, a considerable portion is still passed on to consumers through higher goods prices. Trump had previously argued that companies could absorb the additional costs brought by tariffs themselves rather than passing the burden on to consumers through higher retail prices. However, the New York Fed's findings show that tariffs did drive up U.S. consumer goods prices. In response, White House spokesperson Taylor Rogers said in a statement provided to CNBC that the Trump administration has always maintained that the cost of tariffs will ultimately be borne by foreign exporters that rely on the U.S. market. It should be noted that the New York Fed research team did not specifically disclose the 67 categories of goods included in the analysis, so it is currently impossible to determine which goods were hit most obviously by price shocks. At the same time, U.S. tariff policy itself is also changing. In February this year, the U.S. Supreme Court ruled that several tariff measures implemented by Trump were invalid, prompting the government to refund billions of dollars in related taxes to retailers. However, the White House has said it will continue to advance tariff policies through other legal channels. At present, imports from many countries generally still face tariffs of about 10%, although in many cases this rate is already significantly lower than the levels previously implemented. The New York Fed's research shows that even if some tariff measures have been canceled or lowered, the price effects they previously caused may still persist for some time. For American consumers, changes in tariff policy do not necessarily mean that goods prices will immediately fall, and the lagged effects of higher corporate production costs and price pass-through may still affect everyday consumer spending in the coming quarters.