TARIFF TRIFECTA

Recent research finds tariffs announced on 4/2/25 increased prices of goods three ways. They directly raised the price of imported goods by 1.5 percentage points. Tariffs also raised the price of imported inputs and that raised inflation by half a percentage point. Lastly, because domestic producers faced reduced competition from imports, they raised prices, and that added 0.15 of a percentage point. Collectively, inflation was raised by 2.15 percentage points.