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One of the predictions made by economists when President Trump announce the start of his freewheeling tariff policies in April 2025 was that the costs of the tariffs would ultimately be passed through to consumers, leading to overall higher inflation. Well, President Trump has been tossing out tariff threats, keeping some and withdrawing others. However, the Consumer Price Index showed a rise in total prices of 2.7% for the 12 months up through December 2025. So where’s the inflation?

The short answer goes like this: Imports are about 14% of the US economy. Say that the tariffs, with all exceptions and delays factored in, are imposed at an average rate across all imports of about 10%. If 14% of the economy has a 10% increase in tariffs, then the pass-through to consumer prices would be 1.4%. The evidence suggests that’s roughly what’s happening.

For an overall picture of the rising US tariffs, the Yale Budget Lab has published an update of its “State of Tariffs” report, dated January 19, 2026. The “average effective tariff” is calculated across all imports of goods. You can see the high tariff rates of the 19th century, and the much lower rates since the end of World War II. In the graph, the “pre-substitution rate” refers to the effective tariff rate before patterns of imports adjust to the higher tariffs, while the “post-substitution rate” refers the average rate after the adjustment of imports has happened.
 

For a focus on what happened in 2025 in particular, Gita Gopinath and Brent Neiman have published “The Incidence of Tariffs: Rates and Reality” (University of Chicago, Becker-Friedman Institute, BFI Working Paper 2025-151, January 2026). They differentiate between the announced or “statutory” rates and the actual rates with exceptions and timing lags included. The “weights” and “moving weights” are their version of the pre-substitution and post-substitution lines in the previous figure. As they point out: “A key reason why the price impact of the tariffs remains below many forecasts made in April is that the implemented policy remains much smaller than the announced policy.”
 

Gopinath and Neiman also look at the extent to which tariffs are being passed through in US prices. Their method involved looking at detailed breakdowns of US prices charged for specific goods. Then, they can trace back whether the goods that had tariffs imposed on them rose in price by more than other goods that did not have tariffs imposed. They carry out this exercise in a bunch of ways, focusing in some examples on tariffs on goods and in other on tariffs by country. They find: “When a 10 percent tariff is imposed on an imported good, U.S. importers appear to pay 8-10 percent more, including the tariff, for that good.”

The Yale Budget Lab calculates that the additional cost of the tariff so far work out to about $1400 per year for the median household. However, if the cost of the tariffs is expressed as a percent of income, rather than dollar amount, the negative effect is biggest for those with the lowest income levels, because they rely more heavily on less-expensive imported products.

The Yale Budget Lab also points out that the Federal Reserve has easy access to these kinds of estimates, and thus when the Fed looks at the 2.7% annual rate of inflation in December 2025, it mentally does the calculation: imports are 14% of the economy, tariffs are up about 10%, and 80-100% of the tariffs are passing through to prices. Put it together, and about 1.1-1.4 perentage points of the 2.7% inflation rate is probably due to the tariffs. To put it another way, without President Trump’s tariff policy in place, the measured inflation rate would probably be below the Fed’s target rate of 2% per year. Affordability concerns for the general public would be slightly diminished, and the Fed would be more willing to reduce policy interest rates more quickly. Meanwhile, President Trump’s bigger promises about how tariffs would save the US economy are not aging well.

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