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Mitigating tariffs via USMCA may have limited 2025 price increases

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Abstract

Higher tariffs do not automatically show up one-for-one in consumer prices. Price effects depend on how firms respond. Foreign exporters may cut pre-tariff prices to preserve access to the U.S. market, while domestic importers or retailers may absorb part of the increase with lower margins.

Suggested Citation

  • Enrique Martínez García & Ron Mau, 2026. "Mitigating tariffs via USMCA may have limited 2025 price increases," Dallas Fed Economics 103683, Federal Reserve Bank of Dallas.
    • Handle: RePEc:fip:d00001:103683
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    File URL: https://www.dallasfed.org/research/economics/2026/0818
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