A research report released by the Federal Reserve Bank of New York quantifies the real impact of tariff policies on the daily consumer spending of ordinary people. This study provides the clearest evidence to date showing how tariff policies are transmitted to the prices of final consumer goods. For some time, market economists generally predicted that tariffs would raise prices, but due to factors such as continuous policy adjustments and insufficient transparency in corporate pricing mechanisms, it was difficult to accurately measure the actual impact. The report's data shows that without the relevant tariff measures, many everyday consumer goods could have seen price reductions last year and at the beginning of 2026. The tariff policy not only offset the trend of price reductions but also increased the long-term cost of living burden for American residents.

Key Calculations: Prices of 67 categories of goods were raised by 2.9 percentage points.

A research team from the Federal Reserve Bank of New York calculated in a paper that, as of February 2026, the overall price level of the 67 product categories they monitored was 2.9 percentage points higher than the baseline scenario without tariffs, due to the impact of tariffs. The research team stated that, under the hypothetical scenario without tariffs, the prices of these included products would have fallen by nearly 1%. The study did not disclose the specific product categories included in these 67 categories. The study also established a quantitative correlation between tax rates and prices, showing that for every 1 percentage point increase in the average tariff rate, the final price of consumer goods would rise by approximately 0.25 percentage points one year later. The report noted that the annual price increase for the tracked categories peaked in early 2026, and the pressure on price increases would not dissipate quickly after the peak. Due to the policy lag effect, American consumers would still bear the burden of higher prices for goods due to tariffs in 2027.

The dual transmission mechanism of price increases: direct shocks and supply chain ripple effects

The impact of tariffs on consumer prices can be categorized into two main channels: direct effects and indirect spillover effects. The report shows that approximately two-thirds of the price increases induced by tariffs come directly from the tariffs themselves; the remaining price increases stem from the chain reaction effect within the supply chain. Many U.S. manufacturers heavily rely on imported components and raw materials in their production processes. Tariffs raise the cost of these imported materials, which companies gradually pass on to the finished product prices. The study's three authors, Mary Amiti, Sebastian Heise, and David Weinstein, stated that the impact of tariffs on consumer prices is larger in scale and longer in duration; direct tariff effects alone cannot fully explain the full extent of price increases. The study estimates that approximately 26% of the new tariffs imposed last year ultimately translated into price increases for finished goods, passed on to consumers. Previously, Trump argued that businesses could absorb the increased costs of tariffs themselves and not pass them on to shoppers through price increases; this research data presents a different conclusion to this assessment.

Policy Game: Tariff Adjustments Following the Supreme Court Ruling

In February 2026, the U.S. Supreme Court ruled to overturn several tariffs imposed by Trump, resulting in billions of dollars in tax refunds for retailers. The White House stated that it would continue to pursue tariff measures through other alternative policy tools. Currently, many countries' goods imported into the U.S. face tariffs of approximately 10%, a significant reduction compared to the previous round of tariffs. White House Press Secretary Taylor Rogers stated that the Trump administration has consistently maintained that the costs of tariffs will ultimately be borne by overseas exporters reliant on the U.S. market. This official position differs significantly from the conclusions of research by the Federal Reserve Bank of New York, fueling the ongoing debate about the pros and cons of tariff policies.

Conclusion

This study by the Federal Reserve Bank of New York clearly reveals the internal costs of trade protectionist policies. While tariffs appear to be taxes on imported goods, these costs are passed down through the global supply chain, ultimately placing a significant burden on ordinary consumers in the US. The lagged effect of rising prices means that the policy's impact will not dissipate quickly, and for some time to come, the daily purchasing expenditures of Americans will continue to be hampered by this round of tariffs. For global markets, the study also provides a valuable lesson: the establishment of trade barriers often brings long-term inflationary pressures to the countries that implement them.