Mary Amiti, Sebastian Heise and David E. Weinstein, economists at the Federal Reserve Bank of New York, published an account on October 6, 2026, of how quickly American tariffs reach the prices American households pay. Their answer, summarizing Staff Report 1201: for every 1 percentage point increase in average tariffs, consumer goods prices rise about 0.25% after a year.
About two-thirds of that comes directly, through imported goods. The other third is indirect — prices of American-made goods that use imported inputs, or that compete with imports.
The three stages, at three speeds
The study separates the journey into steps, and the steps move at very different rates.
At the border, roughly 90% of a tariff passes into U.S. import prices, and most of it within the first month. The dollar's depreciation over the period does not change that estimate.
At the factory, almost nothing happens for six months. The effect on domestic producer prices then roughly doubles over the following six. Between the two mechanisms at work, the authors find the marginal-cost channel — American producers paying more for imported inputs — larger than the strategic one, in which domestic firms simply raise prices because the imported alternative got more expensive.
At the register, a 10% rise in import and producer prices lifts retail prices by 5.6%. The gap is distribution: shipping, warehousing, and retail margins account for about half of what a consumer pays, and those costs do not rise with the tariff.
Put together, the authors' illustration is a 10% tariff on all imports raising consumer goods prices about 2.6% after 12 months — with half the direct effect showing up within 3 months and all of it within 6, while the indirect effect more than doubles between months 6 and 12.
What the 2025–26 tariffs did
Applied to the real thing, the estimates say tariffs had added 2.9 percentage points to goods price inflation by February 2026. Without them, the authors write, goods prices would have fallen slightly over that stretch. The effect on the goods price level peaked near 3% that month, with the indirect share at about 30%.
From there the arithmetic turns, and the distinction between a price level and an inflation rate does the work. The researchers project the price-level effect easing to about 2% by August 2026, after the Supreme Court struck down the tariffs imposed under the International Emergency Economic Powers Act on February 20, 2026, and the administration replaced them the same day with a 10% surcharge under Section 122 of the Trade Act of 1974. The tariffs' contribution to 12-month inflation falls to roughly zero by August 2026 and then goes negative, as the 2025 increases drop out of the year-earlier comparison — before turning slightly positive again by mid-2027 because of tariffs on Canada. The forecast holds tariffs at their end-September 2026 levels and adds the scheduled January 2027 increase on Canadian autos.
The difference matters for how the numbers get read. Inflation returning to normal is not prices coming back down; it is prices that went up staying up and stopping there.
What the study does not cover
The sample is 67 non-oil goods categories. Services — about two-thirds of what American consumers actually spend on — are outside it. And the method compares goods more exposed to tariffs against goods less exposed, holding economy-wide conditions fixed, which means it cannot say how much of the broader price movement over the period was caused by tariffs. The authors note tariffs could also have amplified or offset those economy-wide forces.
One further caution for readers abroad: the estimate is built on changes in the average tariff across U.S. imports. It is not a tool for reading off what a single country-specific rate — the 25% applied to Brazilian goods, for instance — does to American shelf prices, which depends on that country's share of the categories involved.
Reporting from the Federal Reserve Bank of New York's Liberty Street Economics and Staff Report 1201, with the tariff litigation timeline from Ward and Smith's practice notes.
