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Tracking the Short-Run Price Impact of U.S. Tariffs

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  • Alberto Cavallo
  • Paola Llamas
  • Franco M. Vazquez

Abstract

We use high-frequency retail microdata to measure the short-run impact of the 2025 U.S. tariffs on consumer prices. By matching daily prices from major U.S. retailers to product-level tariff rates and countries of origin, we construct price indices that isolate the direct effects of tariff changes across goods and trading partners. Prices began rising immediately after the broader tariff measures announced in early March and continued to increase gradually over subsequent months, with imported goods rising roughly twice as much as domestic ones. Our estimated retail tariff pass-through is 20 percent, with a cumulative contribution of about 0.7 percentage points to the all-items Consumer Price Index by September 2025. Our results show that tariff costs were gradually but steadily transmitted to U.S. consumers, with additional spillovers to domestic goods.

Suggested Citation

  • Alberto Cavallo & Paola Llamas & Franco M. Vazquez, 2025. "Tracking the Short-Run Price Impact of U.S. Tariffs," NBER Working Papers 34496, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34496
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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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