Import prices react to tariffs almost immediately. Prices of goods made in the US take six to twelve months to adjust as higher costs move through supply chains.
That difference is central to new research from the Federal Reserve Bank of New York, published on 6 October 2026, on how tariffs reach consumer prices. The paper was written by the New York Fed economists Mary Amiti, Sebastian Heise and David E. Weinstein as part of its Liberty Street Economics series.
The researchers found that tariff-driven increases in consumer goods prices unfold over approximately one year. For every percentage point increase in average tariffs, consumer goods prices rise by about a quarter of a percent after one year.
Roughly two-thirds of the increase comes directly from more expensive imported consumer goods. The remaining third comes through US-made goods, as producers pay more for imported parts and materials and raise markups when competing imports cost more.
The first stage is rapid. Nearly 90% of a tariff increase passes through to import prices almost immediately. About half of the direct effect on retail prices appears within three months, and nearly all of it appears within six months.
The domestic response arrives later. The effects on US-made goods more than double between six and 12 months.
Trump's tariffs were imposed in 2025–2026 under emergency powers. By February 2026, they had added 2.9 percentage points to consumer goods inflation, excluding services and oil. Goods prices would have fallen slightly without the tariffs, the research found.
The tariff effect on consumer goods prices peaked near 3% in February 2026. It eased to about 2% by August 2026 after a Supreme Court ruling struck down the emergency powers tariffs, which were replaced by a lower 10% import tax.
The researchers expect tariff price pressures to pick up again as Canadian levies continue to filter through.
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