{"id":54090,"date":"2025-07-10T12:26:14","date_gmt":"2025-07-10T12:26:14","guid":{"rendered":"https:\/\/www.europesays.com\/us\/54090\/"},"modified":"2025-07-10T12:26:14","modified_gmt":"2025-07-10T12:26:14","slug":"prices-are-now-starting-to-rise-because-of-tariffs-economists-say-this-is-just-the-beginning","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/54090\/","title":{"rendered":"Prices are now starting to rise because of tariffs. Economists say this is just the beginning"},"content":{"rendered":"

CNN
\n \u00a0\u2014\u00a0<\/p>\n

\n Economists, researchers and analysts have warned that President Donald Trump\u2019s sweeping trade policy of tacking steep tariffs on most goods that come into America will deliver a taxing blow to consumers via higher prices.\n <\/p>\n

\n However, recent months\u2019 economic data has shown that overall inflation has remained fairly tame<\/a>.\n <\/p>\n

\n Trump and members of his administration tout the positive economic reports as signs that tariffs are working. However, the chorus of concern is growing: Prices are moving higher, and economists say this is just the beginning.\n <\/p>\n

\n Here\u2019s a look at the mechanisms behind why price hikes, and hotter inflation, are a slow burn:\n <\/p>\n

\n Tariffs have been applied in a staggered manner: <\/strong>The earliest tariffs went into effect<\/a> in February (China, non-USMCA goods) and March (steel, aluminum), but the bulk were not announced or applied until April or later.\n <\/p>\n

\n Trade policy and tariffs are in flux: <\/strong>There have been plenty of instances where announced tariffs have been postponed, suddenly nixed, or unexpectedly increased or decreased in size.\n <\/p>\n

\n Shipping takes time:<\/strong> Sea cargo shipments can take weeks to more than a month to reach the US from other countries.\n <\/p>\n

\n Domestic supply chains take time, too: <\/strong>Once goods land on US soil, they don\u2019t hit shelves the very next day. In addition to domestic transport times, the imported products (which are not always finished goods but rather parts and materials) have to still go through the manufacturing and production processes before being distributed to sales channels.\n <\/p>\n

\n Inventories were loaded up before tariffs hit:<\/strong> Near the end of last year, businesses frontloaded import orders to prepare for any disruptions that could come from a massive, and short-lived East and Gulf Coast port strike<\/a> and also to get ahead of potential tariffs. Those stockpiling efforts surged this year as steep \u2014 and unexpectedly expansive \u2014 tariffs came into view and during periods in which they were postponed or lessened.\n <\/p>\n

\n Some costs are being <\/strong>eaten<\/strong><\/a>:<\/strong> First, foreign exporters are absorbing some of the added costs. A Goldman Sachs analysis puts that share at about 20%, meaning that the remaining 80% of higher costs from tariffs (which are added to the price of wholesale goods when they hit US soil) have been split between US businesses and US consumers. Goldman Sachs economists expect that eventually about 70% of the direct cost of tariffs will be passed onto consumers through higher prices. (However, that 70% could move higher, depending on how much domestic producers change their prices as well, according to the analysis).\n <\/p>\n

\n Businesses are hesitant to pass on higher prices: <\/strong>Consumers, hammered for years by a bout of high inflation, don\u2019t have the appetite \u2014 or the savings \u2014 for higher prices. \u201cFirms\u2019 pricing power is just getting a little weakened because consumer spending is starting to soften,\u201d Nicole Cervi, a Wells Fargo economist, told CNN.\n <\/p>\n

\n Awareness of goods prices is lower in summer than fall and winter: <\/strong>The US is a service-heavy economy, especially in the summertime, when spending is directed more at travel, recreation and leisure. However, some goods prices are already on the rise, and companies are warning more are on the way. However, goods will play a more central role in household budgets come fall and winter, when back-to-school season and spendy holidays such as Halloween and Christmas hit. \u201cI think some of this might become more real for people\u201d later this year, said Tyler Schipper, associate professor in economics and data analysis at the University of St. Thomas in St. Paul, Minnesota.\n <\/p>\n

\"It<\/p>\n

\n Economic data is often lagged:<\/strong> Next week, for example, the Bureau of Labor Statistics will release critical inflation data that covers the month of June.\n <\/p>\n

\n Inflation indices are comprehensive:<\/strong> Rising goods prices are showing up in the inflation data; however, they\u2019ve largely been overshadowed by factors such as falling gas prices and a continued slowing of price hikes for services, particularly rent and housing. As such, inflation data to this point has remained fairly muted \u2014 for now.\n <\/p>\n

\n \u201cIt\u2019s not surprising that tariff effects have not shown up strongly in official consumer prices yet,\u201d according to a Goldman Sachs\u2019 July 8 note.\n <\/p>\n

\n However, the seemingly muted headline inflation numbers don\u2019t tell the full story: Goods prices \u2014 particularly in tariff-exposed categories \u2014 are already on the rise, both private-sector and federal data shows.\n <\/p>\n

\n The May Consumer Price Index showed that several tariff-sensitive categories saw price increases:\n <\/p>\n