--- title: Here's How Low Inflation Would Be Without Trump’s Tariffs, According to New Research description: NBER researchers find Trump-era tariffs boosted U.S. inflation by 0.7 points, pushing prices higher for American consumers. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 497 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Economy and Politics - Banking - Career Advice - Credit - Credit Cards - Debt - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes published: '2025-11-26T13:30:57.000Z' section: Economy and Politics tags: - News word_count: 692 canonical: https://money.com/tariffs-inflation-impact/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Frustrated woman at the supermarket](https://img.money.com/2025/11/News-Tariffs-Increased-Prices.jpg) It’s well established that increased tariffs lead to short-term price hikes on certain goods for consumers. But the complexities involved with international trade have made it difficult to pin down exactly how tariffs change the U.S. inflation rate. At last, researchers at the National Bureau of Economic Research, or NBER, have come up with an answer. Since President Donald Trump announced broad tariff measures starting in the spring, the import taxes have increased the inflation rate by 0.7 percentage points between March and August, as analyzed in an [NBER paper published Monday](https://www.nber.org/papers/w34496). The annual inflation rate for August — which was 2.9% — would have been 2.2% without tariffs, the researchers said, putting the U.S. “much closer to the Federal Reserve’s inflation target” of 2%. Instead, the costs for all sorts of everyday items, including goods produced domestically, have gone in the opposite direction due to tariffs. “Prices began rising immediately after the broader tariff measures announced in early March and continued to increase gradually over subsequent months,” the researchers said. Labor Department data shows that inflation had been cooling for several consecutive months at the start of the year before Trump implemented broad tariffs. The NBER researchers were able to quantify the exact impact of tariffs on inflation levels by matching daily retailer prices to specific products and countries [subject to the new tariffs](https://money.com/what-to-buy-before-trump-tariffs/). ”Our results show that tariff costs were gradually but steadily transmitted to U.S. consumers,” they said. While tariffs of between 10% and 50% are still in effect, the cornerstone of Trump's economic policy faces an uncertain future. The Supreme Court is currently deciding whether the president has [unilateral authority to impose tariffs](https://money.com/tariff-supreme-court-oral-arguments/). A ruling is expected in June or July. ## How tariffs affect inflation Tariffs are import taxes set on certain goods that come from other countries. However, the tax isn’t paid directly by the country the goods are coming from. Instead, it is paid by U.S. businesses that import the goods and distribute them throughout the U.S. In the NBER analysis, the average tariff rates for imported goods were about 20%. The U.S. businesses that face this tax hike have a few options: They could eat the cost and keep prices for consumers the same — but lose revenue. They could hike their prices by about 20% to fully offset the tariffs. Or they could raise prices modestly and take a slight hit to revenue. Research shows the last option is usually what happens. Before making its way to the consumer at the checkout counter, an imported item might pass through several businesses, and each one might tack on a higher price. The result for a consumer may be noticeably [higher costs for specific items](https://money.com/trump-us-tariffs-drugs-trucks-furniture-lumber-2025/). Data from the [Harvard Business School Pricing Lab](https://www.pricinglab.org/tariff-tracker/), which was involved in the NBER study, illustrates how tariffs have increased the prices of imported goods. For example, the largest price increases hit carpets (50%), clothing (13%), glassware and tableware (11%), as well as [coffee and tea](https://money.com/coffee-prices-soar-congress-tariff-repeal-bill/) (6%). Some goods that escaped tariffs directly still rose in price as well. Even U.S.-made carpets surged in price by 36% over the same period of time. Of all the goods the HBS Pricing Lab tracked — both domestic and imported — costs rose 3.7% total. Of course, not everyone is buying carpets and tableware right now, highlighting the importance of the role tariffs play on the overall inflation rate, which aims to be a snapshot of everything a typical American buys. While a 0.7 percentage point increase in the inflation rate might not sound like much, it weighs heavily on already-strained budgets. “All Americans are going to be impacted by this,” Ernie Tedeschi, the director of economics at Yale’s Budget Lab, [previously told Money](https://money.com/where-when-tariffs-hike-prices/). According to Budget Lab research, tariffs represent an income loss of $1,700 for the average U.S. household. “In a trade war,” Tedeschi said, “there’s no place to run, no place to hide.” ![](https://s3.consumersadvocate.org/prd/image/image/25289/medium_2e7b27ce-b30d-40a3-beef-0139ecba6b47.png) If you owe over $20,000 or more, Freedom Debt Relief can help you get back on your feet! [Get Started](https://money.com/pr/u5c2defb44d4?ap_referrer=%2Ftariffs-inflation-impact%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/tariffs-inflation-impact/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Tariffs", "item": "https://money.com/tariffs/" }, { "@type": "ListItem", "position": 4, "name": "Here's How Low Inflation Would Be Without Trump’s Tariffs, According to New Research" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/tariffs-inflation-impact/#webpage", "url": "https://money.com/tariffs-inflation-impact/", "name": "Here's How Low Inflation Would Be Without Trump’s Tariffs, According to New Research", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2025-11-26T13:30:57.000Z", "mainEntity": { "@id": "https://money.com/tariffs-inflation-impact/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/tariffs-inflation-impact/#breadcrumb" } }, { "@type": "NewsArticle", "headline": "Here's How Low Inflation Would Be Without Trump’s Tariffs, According to New Research", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2025/11/News-Tariffs-Increased-Prices.jpg", "width": 1700, "height": 1134, "caption": "News-Tariffs-Increased-Prices" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers.", "image": "https://img.money.com/2022/01/a_adam-hardy.jpg?quality=85&w=400&h=440&crop=1", "email": "adam.hardy@money.com", "jobTitle": "Lead Data Reporter", "alumniOf": "University of South Florida, BA, Magazine Journalism", "subjectOf": [ { "@type": "WebPage", "url": "https://www.thepennyhoarder.com/", "name": "The Penny Hoarder" }, { "@type": "WebPage", "url": "https://www.forbes.com/advisor/", "name": "Forbes Advisor" }, { "@type": "WebPage", "url": "https://creativeloafing.com/", "name": "Creative Loafing" }, { "@type": "WebPage", "url": "https://www.nytimes.com/2023/05/01/opinion/biden-trump-harris-2024.html", "name": "The New York Times" }, { "@type": "WebPage", "url": "https://www.washingtonpost.com/opinions/2022/12/26/flexible-spending-account-is-flawed-benefit/", "name": "The Washington Post" }, { "@type": "WebPage", "url": "https://www.bloomberg.com/opinion/articles/2025-09-20/-100-000-h-1b-visa-fee-is-a-gamble-that-could-protect-us-jobs", "name": "Bloomberg" }, { "@type": "WebPage", "url": "https://petrieflom.law.harvard.edu/2024/02/08/whoop-and-the-irs-how-tax-avoidance-helps-health/", "name": "Harvard Law School" }, { "@type": "WebPage", "url": "https://www.federalregister.gov/documents/2025/12/29/2025-23853/weighted-selection-process-for-registrants-and-petitioners-seeking-to-file-cap-subject-h-1b#footnote-33-p60883", "name": "The Federal Register" }, { "@type": "WebPage", "url": "https://www.nclc.org/resources/what-states-can-do-to-stop-credit-reporting-abuses/", "name": "National Consumer Law Center" }, { "@type": "WebPage", "url": "https://www.cbsnews.com/news/open-enrollment-irs-changes-fsa-hsa-flexible-spending-account-health-savings-account-2023/", "name": "CBS News" }, { "@type": "WebPage", "url": "https://www.beckershospitalreview.com/rankings-and-ratings/20-top-us-hospitals-for-2025-per-money/", "name": "Becker's Hospital Review" }, { "@type": "WebPage", "url": "https://www.businessinsider.com/using-chatgpt-ai-write-cover-letters-job-applications-2023-2", "name": "Business Insider" }, { "@type": "WebPage", "url": "https://www.motherjones.com/politics/2026/04/a-major-strike-of-beef-workers-pauses-in-colorado-but-workers-say-the-fight-isnt-over/", "name": "Mother Jones" }, { "@type": "WebPage", "url": "https://theweek.com/business/economy/job-market-frozen-thawing", "name": "The Week" }, { "@type": "WebPage", "url": "https://fortune.com/2023/12/20/workers-lose-money-on-unused-fsa-accounts-deadlines-what-companies-should-do/", "name": "Fortune" }, { "@type": "WebPage", "url": "https://www.inquirer.com/opinion/editorials/liberation-day-tariffs-economy-stock-market-trump-20250401.html", "name": "The Philadelphia Inquirer" }, { "@type": "WebPage", "url": "https://www.nasfaa.org/news-item/37955/Student_Loan_Changes_2026_New_Repayment_Options_Taxable_Forgiveness_and_More_on_the_Way", "name": "National Association of Student Financial Aid Administrators (NAFSAA)" }, { "@type": "WebPage", "url": "https://eab.com/resources/blog/adult-education-blog/graduate-funding-shift-pricing-aid-strategies-aligned/", "name": "Education Advisory Board (EAB)" }, { "@type": "WebPage", "url": "https://ticas.org/california/state-private-loans-protections-blog/", "name": "The Institute for College Access & Success (TICAS)" }, { "@type": "WebPage", "url": "https://thismorningwithgordondeal.com/b/This-Morning-with-Gordon-Deal-August-04,-2026/421564107823081285.html", "name": "This Morning with Gordon Deal" }, { "@type": "WebPage", "url": "https://www.empower.com/the-currency/life/pumpkin-spice-season-spending", "name": "Empower" }, { "@type": "WebPage", "url": "https://www.reddit.com/r/Economics/comments/1va10oa/comment/p0i9bju/", "name": "Reddit" } ], "sameAs": [ "https://www.x.com/hardyjournalism", "https://www.linkedin.com/in/hardyjournalism/" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2025-11-26T13:30:57.000Z", "description": "NBER researchers find Trump-era tariffs boosted U.S. inflation by 0.7 points, pushing prices higher for American consumers.", "abstract": "NBER researchers find Trump-era tariffs boosted U.S. inflation by 0.7 points, pushing prices higher for American consumers.", "@id": "https://money.com/tariffs-inflation-impact/", "inLanguage": "en-US", "editor": [ { "@type": "Person", "name": "Katherine Peach", "url": "https://money.com/author/katherine-peach/", "@id": "https://money.com/author/katherine-peach/#author", "description": "Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!)\r\n\r\nKatherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others.\r\n\r\nKatherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa.", "jobTitle": "Associate Editor", "alumniOf": "University of Maryland, Baltimore County", "worksFor": { "@id": "https://money.com/#organization" } } ], "wordCount": 692, "keywords": [ "News" ], "about": [ { "@type": "Thing", "name": "Political economy", "sameAs": [ "https://en.wikipedia.org/wiki/Political_economy" ] }, { "@type": "Thing", "name": "Tariff", "sameAs": [ "https://en.wikipedia.org/wiki/Tariff" ] } ] } ] } ```