How have Trump’s 2025 tariffs altered import prices and sectoral inflation?

1. How big were the tariffs in practice — headline vs. effective rates

The administration imposed sweeping headline tariffs (including a 10% universal rate and higher sectoral levies that at times approached 30%), but analysts stress the difference between announced duties and the “effective” tariff rate on actual imports; effective rates rose substantially in 2025, with some estimates implying the U.S. effective rate would approach 20% on a 2024 consumption basket, driving the observable transmission to prices ^{[4] [5] [6]}.

2. Who bore the burden — importers, foreign suppliers, or U.S. consumers and firms?

Academic and market evidence points to most of the tariff burden being passed into the U.S. economy rather than absorbed abroad: a leading study estimated 94% of tariff costs were passed through to U.S. firms in 2025, while Reuters and other reporting found U.S. companies and consumers “bearing the brunt” of the new import taxes ^{[7] [8]}. Some firms and sectors absorbed part of the hit, especially where competition limited pricing power, but pass-through to consumers and downstream firms was widespread ^[9].

3. Sectoral winners and losers — where prices moved most

Modeling and sectoral data consistently show agriculture and durable goods manufacturing took the largest price and output hits: PIIE and related G‑Cubed model runs find agricultural prices up roughly 1% and durable goods prices up as much as 6% in some scenarios, with output and employment falling in those exposed sectors ^{[1] [3]}. Consumer brands and certain European producers initially tried to absorb costs, but many consumer-facing companies (e.g., household goods, apparel, watches) raised retail prices in 2025 as pass-through materialized ^[8].

4. Aggregate inflation — modest but meaningful lift, estimates differ

Macro forecasters diverge on the overall inflation impulse: J.P. Morgan raised its PCE forecast by about 0.2–0.3 percentage points for 2025, PIMCO and some private-sector estimates put core inflation up roughly 0.4–0.5 ppts due to partial pass-through, while Tax Foundation/PIIE-linked commentary and some studies suggest tariffs could raise inflation by as much as about one full percentage point in certain scenarios ^{[4] [9] [2]}. PIIE’s modeling finds US inflation rising by roughly 0.4 ppts in lower‑tariff scenarios and larger in higher‑tariff and retaliation scenarios ^{[1] [3]}.

5. Timing, front‑loading, and measurement complications

Observed price and trade patterns were heavily shaped by anticipatory behavior and data quirks: importers front‑loaded shipments before tariffs took effect, spiking import values early in 2025 and muting immediate price impacts later in the year, while a government shutdown disrupted CPI data collection and clouded measurement in some months ^{[10] [11]}. Those dynamics mean much of the tariff shock was deferred into inventories and subsequent pricing rounds, making short‑run inflation estimates sensitive to timing.

6. Retaliation, exchange rates and indirect channels

Retaliatory tariffs and global responses amplified the damage in some scenarios: PIIE finds retaliation deepens U.S. and global losses and raises prices further, while analysts note dollar movements and reduced foreign supply can add indirect upward pressure on import prices even excluding the tariff line itself ^{[3] [8]}. The drop in imports from targeted countries like China (and substitution to other suppliers) reshaped trade patterns and sectoral price trajectories ^{[7] [10]}.

7. What this means going forward — uneven, enduring, but uncertain

Across sources the consistent signal is inequality of impact: certain sectors face sharp, persistent price and output effects while headline macro inflation rises by a modest but nontrivial amount; model ranges and real‑world frictions leave the exact inflation lift uncertain, between a few tenths and about one percentage point depending on pass‑through, retaliation, and legal/policy changes ^{[1] [2] [9]}. Several commentators also caution that legal challenges, exemptions and future tariff adjustments will keep the ultimate tally unsettled ^{[6] [9]}.