Americans would have seen a modest decline in the cost of goods they pay for were it not for tariffs imposed under a radical trade policy ordered by President Donald Trump, according to new research from the Federal Reserve Bank of New York.
By February 2026, the tariffs had added 2.9 percentage points to goods price inflation, according to the authors, who estimate that the price of a selected basket of everyday goods would have fallen by almost 1% had it not been for those levies.
The group, which includes economists from the New York Fed and an economics professor from Columbia, wrote that tariffs have "a larger and more drawn-out impact on consumer prices" than the direct cost of the duties alone would imply."
The researchers traced tariffs through three stages: the border, the factory and the store. For each percentage-point rise in average tariffs, they found consumer goods prices climbed about a quarter of a percent after a year.
About two-thirds of that came from higher prices on imported goods. The other third came from fomestic producers, who have paid more for imported parts and also marked up their products to price them in line with competing imports that had become more expensive.
The president had pitched the tariffs as a way to revitalize local manufacturing, insisting exporters from other countries would bear the cost. But the researchers found roughly 90% of the tariffs actually ended up passing through to US import prices. Costs from the total direct effect of tariffs were fully felt within six months, while the full impact from knock-on effects landed within a year.
The study covered a 67-item basket of non-oil consumer goods categories and left out services, which make up about two-thirds of what consumers are typically expected to spend their money on.
While the effect of tariffs is slowly fading from its February peak, the authors projected it would ease to about 2% by August following a Supreme Court ruling that ended the tariffs imposed under the International Emergency Economic Powers Act, which Trump later replaced with a lower 10% economic surcharge that was also struck down.
They expect the tariff contribution to annual goods inflation to turn slightly positive again by mid-2027 as a slate of levies on Canadian goods announced in August and a planned January 2027 increase on Canadian autos work through the system.
The research comes as inflation headaches continue to plague policymakers at the Fed. The consumer price index rose by a seasonally adjusted 0.4% in August, driving a 3.4% increase over the 12 months leading up to the month, according to the Bureau of Labor Statistics. Energy prices were up 16.3% from a year earlier, while core CPI, which excludes food and energy, rose 2.4% over the year.
In its mid-September rate meeting, the Federal Open Market Committee raised the federal funds target range by a quarter point to 3.75% to 4%, its first increase in more than three years. The minutes from that meeting released Wednesday afternoon pointed to possibly one more increase this year.
The latest read on the Tax Foundation's tariff tracker, which estimates the extent of the policy's impact, suggests the tariffs have translated into an average tax increase of $820 per household this year, down from $1,000 in 2025 before the Supreme Court ruling struck down the initial slate of IEEPA tariffs. The foundation also estimates the tariffs will reduce long-run GDP by 0.4%, while cutting hours worked by the equivalent of 338,000 full-time jobs.
Relative to income, the Tax Foundation determined that lower earners get hit marginally harder by the tariffs. Its tracker estimates most income groups lose about 0.7% of after-tax income in 2026, compared to 0.5% to 0.6% for the top 1% of earners.
In a more recent analysis this week, the Tax Foundation estimated that removing every tariff imposed since 2017 would cost nearly $1.8 trillion in forgone revenue from 2027 through 2036. As a fix, Erica York, an economist at the think tank, suggested a value-added tax (VAT) collected at each stage of production. By her calculations, a broad VAT at just 1% has the potential to fully replace the lost tariff revenue while increasing output, the capital stock and hours worked.
"Tariffs can distort returns across sectors and types of investment, leading to capital misallocation [and] they invite retaliation, which compounds the economic cost without raising additional revenue for the Treasury," York argued.
"Rather than continuing the administration’s tariff policy, policymakers should explore new solutions that can raise sustainable revenue with fewer distortions."
LPL Financial and Raymond James also add independent advisors from Osaic and Edward Jones in Michigan and Arizona.
The SEC-registered RIA advises on more than $1 billion in client assets, with no advisory fee through 2027 and no human financial advisors.
The four wirehouse firms lost 1,449 experienced advisors and recruited 932 in the first six months of the year, according to Diamond Consultants.
Merit's 10th Commonwealth addition deepens its Western New York reach, while another Hightower partner joins its Signature Wealth platform in Michigan.
Report on Climate Action 100+ signals risk for passive managers' 13G status heading into the 2027 proxy season.
Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor
