Trump's tariffs increase U.S. consumer costs: New York Fed reports prices of related goods up nearly 3%, impact may last until 2027

According to Wisdom Finance APP, the latest research by the New York Fed shows that the tariff policies implemented by President Trump have significantly increased the cost for American consumers to purchase everyday goods. Without the relevant tariffs, prices of many types of goods from last year to early this year might have declined, but not only did tariffs offset this downward trend, they also forced consumers to face higher spending pressures.

According to the report released by the New York Fed research team, as of February this year, due to the impact of tariff policies, the prices of 67 tracked categories of consumer goods were 2.9% higher than they would have been without the tariffs. Researchers estimate that if these tariffs had not been implemented, prices of the related goods might have fallen by nearly 1%.

This research provides new quantitative evidence for assessing the real impact of Trump’s tariff policies on American consumers. Previously, economists generally expected tariffs to drive up goods prices, but due to continuous policy adjustments and lack of transparency in corporate pricing mechanisms, it had always been difficult to accurately measure how much of the tariff was ultimately passed on to consumers.

The New York Fed’s research found that the impact of tariffs on consumer goods prices is not only significant but also persistent. Data show that for every 1 percentage point increase in the average tariff rate, consumer goods prices rise by about 0.25% one year later. The study points out that annual price increases for tracked goods peak at the beginning of 2026, but the price pressure from tariffs does not dissipate quickly. Even as the initial price hikes gradually slow, consumers may still bear the additional costs caused by the related policies in 2027.

It is noteworthy that the impact of tariffs on goods prices does not come entirely from the tax burden on imported goods themselves. The New York Fed estimates that about two-thirds of the price hike impact comes directly from tariffs, while the rest comes from indirect transmission effects. For example, some US domestic companies, while producing final products locally, need to import components and raw materials from overseas. When these inputs become more expensive due to tariffs, the company’s production costs also rise, which may further be reflected in the final selling price of the goods.

The authors of the report, Mary Amiti, Sebastian Heise, and David Weinstein, point out that the impact of tariffs on consumer prices is greater and lasts longer than direct tax calculations alone indicate. The research team also estimates that about 26% of the tariff increases in 2025 will ultimately be passed on to consumer prices. This means that while part of the added cost may be borne by importers, retailers, or other businesses, a considerable portion is still transferred to consumers through higher product prices.

Trump previously argued that companies could absorb the extra costs brought by tariffs themselves without passing the burden on to consumers through higher retail prices. However, the New York Fed’s research results show that tariffs have indeed driven up US consumer goods prices.

In response, White House spokesperson Taylor Rogers stated in a statement to CNBC that the Trump administration has always insisted that the cost of tariffs will ultimately be borne by foreign exporters who rely on the US market.

It should be noted that the New York Fed’s research team did not disclose in detail the 67 categories of goods included in the analysis, so it is currently impossible to determine which goods experienced the most significant price shocks. Meanwhile, US tariff policy itself is also changing. In February of this year, the US Supreme Court ruled that several tariff measures implemented by Trump were invalid, prompting the government to refund billions of dollars in related tariffs to retailers.

However, the White House has stated that it will continue to pursue tariff policies through other legal avenues. Currently, imported goods from multiple countries still generally face tariffs of about 10%, although this rate is already significantly lower in many cases than previously implemented levels.

The New York Fed’s research indicates that even if some tariff measures have been canceled or reduced, their prior impact on prices may still persist for some time. For American consumers, changes in tariff policies do not necessarily mean that goods prices will fall immediately, and the delayed effects of rising business production costs and price transmission may continue to affect daily consumer spending in the coming quarters.