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A new paper from the New York Federal Reserve concludes that tariffs imposed under President Donald Trump were a major driver of rising prices for many everyday goods in early 2024 and through most of 2025. Fed researchers estimated that, absent those tariffs, prices for a basket of common consumer items would have fallen for much of last year and into early 2026.
The Fed economists examined price movements for 67 widely purchased consumer goods and weighted their findings using 2022 consumer spending patterns. They estimated that the tariffs pushed goods-price growth higher, with the direct and indirect effects combining to raise headline goods inflation by roughly 3 percentage points at its peak in February of this year. Had tariffs not been in place, the researchers said, goods prices would have been about 1 percentage point lower in January and February.
How the Fed links tariffs to consumer prices
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The paper distinguishes between the direct cost of tariffs on imported final goods and a slower, indirect channel that works through imported inputs. The researchers wrote that the indirect effect—when tariffs raise the cost of components and raw materials that firms import—typically shows up in consumer prices about a year later.
“Goods price inflation was back near its slightly negative pre-COVID average for most of 2024 and began to edge up late that year, before the new tariffs were introduced. It then picked up through 2025. Our estimates attribute this increase to the tariffs,” the New York Fed said.
“As a result, tariffs have a larger and more drawn-out impact on consumer prices than the direct effect alone would suggest,” the paper added.
The Fed’s timeline also ties the waning impact of tariffs to legal developments: the researchers estimated the total effect of the tariffs on goods prices had largely dissipated by August, roughly six months after the Supreme Court struck down the specific IEEPA-authorized tariffs tied to the Trump administration.
What this means for headline inflation and shoppers
The paper focuses on consumer goods inflation — the portion of inflation that reflects store-bought items such as groceries, clothing and electronics — and does not include services like rent or utilities. The New York Fed cautioned that goods inflation is not directly comparable to overall consumer-price inflation, which also includes energy costs such as gasoline and fuel.
The report comes as broader inflationary pressures have been driven recently by a sharp rise in oil prices amid the Iran war. Consumer price growth was 3.4% year over year in August, and investors were awaiting the September inflation report due on October 14, the paper noted.
In response to the Fed findings, White House spokesperson Taylor Rodgers provided a statement to Business Insider defending the administration’s trade policies. “The nearly 20 trade deals negotiated by the President are protecting the US economy from unfair trade practices and leveling the playing field for American workers. The Trump administration has consistently maintained that the cost of tariffs will ultimately be borne by foreign exporters who rely on access to the American economy.”
The New York Fed paper adds a quantified estimate to the debate over the inflationary effects of tariffs, attributing a substantial portion of goods-price increases in 2024–25 to trade policy while noting the lagged and persistent nature of those effects.
