'Sneakflation': how tariffs are gradually raising costs for American consumers

Summary

Facebook Tweet Email Link When tariffs are tacked on to many imported goods, someone’s got to foot the bill. According to President Donald Trump, foreign countries and overseas businesses are eating the cost. But evidence shows that American consumers and businesses are paying for the tariffs the administration has implemented as its go-to policy levers. “It been proven, that even at this late stage, Tariffs have not caused Inflation, or any other problems for America, other than massive amounts of CASH pouring into our Treasury’s coffers,” Trump posted on his social media site, Truth Social, earlier this month. “Also, it has been shown that, for the most part, Consumers aren’t even paying these Tariffs, it is mostly Companies and Governments, many of them Foreign, picking up the tabs.” Trump’s post did not include any substantiation for his claims. There is a growing field of evidence to the contrary: Economic data, academic research, businesses’ expenses, and people’s first-hand experiences are showing that it’s American firms and consumers who are seeing increasingly higher costs due to the tariffs. That burden is expected to grow only heavier in the months — and, potentially, years — to come as more tariffs take effect, and others settle more deeply into supply chains. If foreign exporters are absorbing tariff costs, one possible way to see that in US economic data is whether they’re lowering their pre-tariff export prices. If that’s the case, it would show up as lower or falling US import prices. Recent months’ data, however, has shown that import prices (which exclude the costs of tariffs, insurance and shipping costs) have held mostly steady. They’ve risen by 0.5% since the November election and by 0.2% since March, after which the bulk of new tariffs were announced, according to a recent note from Pantheon Macroeconomics. “One argument that had looked plausible until recently was that import prices had been supported by pre-tariff stockpiling in [the last pa...