How have tariffs affected the prices of goods sold to American consumers?

Tariffs are, in effect, taxes imposed on goods the U.S. imports from other nations. As such, they can affect prices depending on how much of the tariffs are passed through to consumers. But how much have those prices changed?

A new paper by the Harvard Pricing Lab's Alberto Cavallo, Paola Llamas, and Franco Vazquez explores how President Trump's tariffs have affected the prices of goods being sold in the U.S. using daily pricing data from PriceStats, which was formerly known as the Billion Prices Project.

The following chart, which has been updated with an extra month's worth of data beyond what the authors presented in their paper and which we've annotated, shows how the prices of three categories of goods have changed in the period from 1 October 2024 through 12 October 2025.

Imported goods make up one category, but Cavallo, Llamas, and Vazquez divide domestic goods into two categories: ones that are also affected by tariffs and ones that are not. They describe how they determined what goods fall into each of these three categories:

To better understand the drivers of price changes among domestic goods, we combine information on countries of origin and HS code classifications to identify which products are more affected by tariffs. Barring a few exceptions, all imported goods in our sample are subject to at least the baseline 10 percent tariff. Domestic goods, however, can be differentiated by their degree of indirect exposure.

We classify a domestic good as affected if it either belongs to an HS category directly targeted by the tariffs or falls within a three-digit COICOP category in which more than half of the products are imported. The first criterion captures goods such as those made of steel and aluminum, whose imported counterparts faced explicit tariff rates at the HS level. The second identifies domestic goods in import-intensive consumption categories, where competition with imports affected by country-level tariffs is expected to be strongest.

With that definition set, here's how they describe the various phases of the tariffs covered in the period covered by the data in this chart:

Before the tariffs took effect, two patterns are evident. First, prices for imported goods fell temporarily from late November to early January, reflecting typical holiday discounts in categories such as electronics and household items. Second, both domestic and imported goods exhibited a mild deflationary trend during the initial months. This reflects the matched-model index structure and product composition: many goods, particularly electronics, are introduced at high prices and discounted gradually over time. Because the index does not attempt to link new and old models of similar goods, or apply quality adjustments, these markdowns appear as steady price declines.

We think this is the weakest part of their analysis. Because they focused on President Trump's tariffs, they did not acknowledge the role of the Biden-Harris administration's tariffs and anti-free trade measures that were contributing factors to these trends in this period.

In particular, what they really missed was the actions of importers to frontload (or frontrun) the new tariffs they faced in 2024 and 2025. Here, producers and importers cranked up production and shipping of goods to beat the clock on when tariffs and other trade restrictions would go into effect. These surges in supply, which did not coincide with a matching surge in end-consumer demand, contributed to the decline in consumer prices of imported goods during this period.

The largest decline in import prices took place after the 2024 elections, for which the reelection of President Trump would ensure new tariffs were on the horizon for importers, giving them an additional incentive to resume their frontloading practices. The authors attribute this plunge in import prices to "typical holiday discounts" in this period, but this assertion is not well supported by the data they've made available - we would need to see this assertion supported and quantified by a similar pattern during these months in previous years.

The rest of their analysis is stronger as it fits their primary focus on President Trump's tariff policies:

Four salient patterns emerge from Figure 2, summarizing the main features of the price adjustment. First, retail prices responded almost immediately to major tariff announcements, often within days. After March 4, imported goods prices rose by about 2 percent, while domestic prices increased by roughly half as much. Following the “Liberation Day” announcement on April 2, which introduced a 10 percent baseline tariff on all imports, imported goods continued to rise, whereas domestic prices stabilized. The tariff pause on Chinese goods announced on May 12 led to a quick temporary drop in all prices, while the “letters” escalation in July led to renewed pressures. These rapid reactions suggest that retailers were forward-looking, attentive to tariff news, and adjusted prices in anticipation of expected, rather than realized, import costs.

Second, most of the pass-through is gradual rather than discrete. After the tariffs are implemented, prices followed a new, persistent upward trajectory, marking a clear break from the pre-tariff trends. This suggests that tariffs affected retail prices mostly through a sustained upward pressure rather than a single, discrete jump.

Third, domestic goods were also affected, exhibiting a milder but sustained increase in prices since March. This highlights the broader reach of tariff policies beyond directly targeted imports. Several mechanisms may account for this pattern. Producers and sellers of domestic goods may raise prices in response to reduced competition from foreign goods, particularly in categories where domestic and imported products are close substitutes (Flaaen, Hortacsu and Tintelnot (2020)). Many U.S.-made products rely on imported inputs—such as components, packaging, or raw materials—from tariffed countries (Amiti, Redding and Weinstein (2019)). Additional factors could include efforts to distribute cost increases across product lines, maintain relative price structures, or expectations that higher inflation could increase future costs....

Finally, the magnitude of the price increases appears to be modest relative to some of the tariff announcements. Between March and September 2025, imported goods rose by about 4 percent and domestic goods by 2 percent. Relative to pre-tariff trends, these increases amount to 5.4 and 3 percent, respectively.

Their analysis covers the period through 12 September 2025. Since their paper was released, they've provided additional pricing data for each series through 12 October 2025. That data shows increases in prices for both imported and non-tariff-affected domestic goods, whose price indices are respectively some 2.2% and 1.4% above their 1 October 2024 level. Domestic goods affected by tariffs however have recently seen a marked decline in their prices, and are now just 0.2% above their 1 October 2025 level.

The increase in non-tariff affected domestic goods and decrease in tariff-affected domestic goods provides a good indication that the effect of tariffs on prices is more complex than might be expected. That's because in addition to being complex in how producers and suppliers might choose to pass through the cost of tariffs to consumers, other factors, including things like supply and demand, also affect prices.

Previously on Political Calculations

We regularly cover trade between the U.S. and China. Here's our monthly coverage spanning trade data from early 2024, which describes how imports first fell in response to the Biden-Harris administration's anti-free trade policies and tariffs, then surged as importers sought to beat the clock on new tariffs going into effect in early 2025, then fell again after those tariffs were imposed.

• US-China Trade Decline May Have Hit a Bottom
• Trade Between U.S., China, and Rest of the World Falls in Storm of Anti-Free Trade Policies
• Diverging Trends in U.S. Trade with China and the Rest of the World
• U.S. Trade with World Slowly Recovers as Trade with China Slowly Falls
• US-China Trade Racing to Beat Clock on New Biden-Harris Tariffs
• US Imports Surge as China Beats Clock on Biden-Harris Tariffs
• The State of US-China Trade as New Tariffs Take Effect
• China's Exports Surge as Factories Resume Rush to Beat New Tariffs
• US-China Trade Turns Back Down
• A Trade Story in Charts
• The End of 2024 Sees Surge in Imports to U.S.
• US-China Trade Boosted by Frontrunning
• US-China Trade Slows After Frontrunning Ends
• US-China Trade Drops Ahead of Trump's "Liberation Day" Tariffs
• US-China Trade Plunges at Start of New Tariff War
• US-China Cargo Trade Sinks as 2025 Tariff War Takes Toll
• Negative Impact of US-China Tariff War Deepens
• U.S.-China Trade Rebounds on Boost from Chinese Exports of Rare Earths

References

Alberto Cavallo, Paola Llamas, and Franco Vazquez. Tracking the Short-Run Price Impact of U.S. Tariffs. [Ungated PDF Document]. 27 October 2025.

Cavallo, Llamas & Vasquez (2025). Domestic Goods in Affected and Unaffected Categories. [CSV data]. Updated 12 October 2025.

Image credit: Wooden blocks spelling tariffs on a table photo by Markus Winkler on Unsplash.