New York Fed Study Measures the Cost of Tariffs

The economic consequences of U.S. trade policy are becoming more measurable as researchers examine how import duties affect consumer prices. A study by economists at the Federal Reserve Bank of New York found that tariffs imposed during 2025 and early 2026 raised prices across 67 categories of goods by 2.9 percentage points as of February 2026. Without those measures, prices for the products examined would have declined by almost 1%.

The findings provide evidence of how trade policy can influence household purchasing power beyond the immediate cost of imported products. Although tariffs are collected from importers, their economic burden can be distributed across businesses and consumers through pricing decisions, supply-chain adjustments and changes in sourcing strategies.

The researchers did not identify the specific 67 categories included in their analysis. Consequently, the reported effect should be understood as applying to the study’s selected group of goods rather than representing a uniform increase across all consumer prices.

How Tariffs Move Through Supply Chains

The study found that approximately two-thirds of the tariff-related price impact came directly from the levies themselves. The remaining increase reflected indirect effects, including higher costs for U.S. companies that depend on imported components and materials.

This distinction is important because the inflationary consequences of tariffs can extend beyond finished products crossing the border. Domestic manufacturers and other businesses may face higher production expenses when imported inputs become more expensive, creating additional pressure on prices throughout the supply chain.

According to the researchers, each percentage-point increase in the average tariff was associated with consumer goods prices rising by roughly 0.25% a year later. The report also indicated that around 26% of the previous year’s tariff increases had passed through into higher prices by the time of the analysis.

These findings suggest that the timing of tariff-related inflation can be difficult to assess. Companies may initially absorb some additional costs, adjust supplier arrangements or delay price changes before passing a larger share of expenses to customers.

Policy Uncertainty and the Outlook for Consumer Prices

The White House has maintained that foreign exporters would ultimately bear the cost of tariffs, while the New York Fed research indicates that U.S. consumers and businesses also experienced measurable effects. The differing positions underscore the importance of examining actual price data rather than relying exclusively on policy arguments.

The report also arrives after the Supreme Court struck down many of the administration’s tariffs in February 2026. Subsequent policy efforts have sought to maintain import duties through alternative measures, with products from many countries reportedly facing tariffs of around 10%, often below previous levels.

For households, retailers and investors, the next question is how quickly these changes influence prices. The New York Fed expects elevated prices associated with the earlier tariff measures to persist into 2027. Future inflation readings, changes in import costs and companies’ pricing decisions will help determine whether that pressure gradually eases.