Tariffs Are Driving Prices Higher — And This Is Just the Beginning

Tariffs Are Quietly Raising Prices — and Inflation Could Be About to Accelerate

In recent months, consumer prices in the United States have begun to rise — quietly but steadily. Behind the scenes, President Donald Trump’s sweeping tariff strategy is starting to take hold. With new duties on a wide range of imports, economists now warn that inflation is entering a new phase, one that may affect millions of Americans more directly in the months ahead.

While overall inflation data has remained relatively mild, experts say that’s about to change.

How Tariffs Work Their Way Into the Economy

The impact of tariffs isn’t immediate. There’s a lag between when a policy is implemented and when it shows up at the cash register. Several factors help explain this delay:

• Staggered implementation: Early tariffs began in February (on China and non-USMCA goods), with others added in March (steel and aluminum). The largest batch came in April or later.

• Supply chain delays: Products shipped by sea take weeks to reach US ports. After that, they must be transported domestically and often assembled or processed before reaching store shelves.

• Inventory buildup: Businesses rushed to import goods before tariffs kicked in, softening the short-term impact.

• Cost absorption: Foreign suppliers are absorbing roughly 20% of tariff costs, according to Goldman Sachs. But around 70–80% still falls on US businesses and consumers.

• Consumer pushback: Companies are hesitant to raise prices too quickly as consumers remain sensitive to inflation after years of rising costs.

• Seasonal spending habits: Summer spending skews toward services (travel, entertainment), but demand for goods will increase in the fall and winter.

Where Prices Are Already Rising

Despite muted headline inflation figures, tariff-sensitive categories are already seeing price increases:

• Appliances: Prices rose 0.8% in both April and May — the largest monthly increases in nearly four years.

• Toys: Prices jumped 1.3% in May, matching a four-year high.

• Home furnishings, tools, and sporting goods also recorded accelerated price hikes.

DataWeave, which tracks pricing across 200,000 products from major e-commerce retailers, reported a steady increase in prices since January:

CategoryPrice Increase (Jan–June)Home & Furniture+4.7%Toys+3.8%Apparel & Footwear+1.7%

Some individual retailers are seeing even sharper increases. Toy prices at Walmart and Target, for example, rose by 7.4% and 6.1%, respectively.

What to Expect in the Fall and Winter

The real impact of tariffs could become more visible later this year. Fall and winter bring higher demand for goods — from back-to-school shopping to holiday season purchases. That’s when many economists expect the cumulative effects of tariffs to reach the average consumer.

“Some of this might become more real for people later this year,” said Tyler Schipper, an economics professor at the University of St. Thomas.

Wells Fargo economists forecast that core goods inflation — excluding food and energy — will rise in the second half of the year. The overall Consumer Price Index (CPI) could peak near 2.9% by year-end.

Inflation May Be Modest, But the Cost to Consumers Is Real

Even if the inflation increase remains modest in numerical terms, the real-world impact on households could be significant. Consumers are already struggling with tight budgets and depleted savings. As prices climb further, the pressure may grow.

In response, companies are likely to adopt tactics such as:

• Shrinkflation: Reducing package sizes while keeping prices flat.

• Private label expansion: Offering more in-house brands to offset rising input costs.

“The percentage changes we’re seeing now are already higher than in previous years,” said Karthik Bettadapura, CEO of DataWeave. “We anticipate more price creep in the coming months as tariffs ripple through supply chains.”

Bottom Line

So far, tariff-related inflation has been a slow burn — but the heat is rising. As supply chains catch up and inventory buffers deplete, consumers can expect to feel the effects more acutely in the second half of the year. While the full inflationary wave may not crash all at once, the tide is clearly turning. For households already stretched thin, even modest price increases could hit hard.