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The Impact of Tariffs on Inflation

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Abstract

This brief introduces a new methodology that quantifies how price increases at the border transmit to US consumers. The methodology allows the authors to determine the share of US consumption that would be subject to such increases and to break them down into different country and industry sources. Among other applications, the methodology enables the authors to compute the effects of various tariff plans on consumer price inflation, as tariffs effectively increase the border prices of imported goods.

Suggested Citation

  • Omar Barbiero & Hillary Stein, 2025. "The Impact of Tariffs on Inflation," Current Policy Perspectives 25-2, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbcq:99508
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    More about this item

    Keywords

    tariffs; inflation; import prices; indirect imports;
    All these keywords.

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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