Hard evidence of tariff inflation

For months, tariffs have lived in a gray theoretical zone…

Supporters insisted they wouldn’t raise prices, while critics warned they would. And most people were left arguing theory instead of evidence.

Now the data is catching up… and it’s pointing in one direction.

Harvard’s Tariff Tracker, which follows millions of real-time prices across U.S. retailers, shows prices are higher than they would have been without the latest round of tariffs.

Prices are breaking trend

According to Harvard Business School economist Alberto Cavallo, tariff-affected goods have pushed well above their pre-tariff pricing paths:

• Import prices: up 9.7% compared with pre-2025 levels
• Domestic prices: up 4.4%
• Cumulative CPI impact: roughly 1% since March 2025

That last point matters.

This isn’t just an “imports problem.” Domestic producers are raising prices too… a sign that higher costs are spreading domestically as well.

In other words, when foreign goods get more expensive, local producers raise prices too, because consumers don’t have a choice.

Tariffs aren’t free

Until not so long ago, companies absorbed most of the extra tariff costs, but that buffer is thinning. Here’s where things stand:

• 43% of tariff costs had already been passed on to consumers as of October, according to Harvard
• Goldman Sachs estimates consumers could bear around 55% by year-end

The highest inflation is showing up in goods made in Canada and the U.S., not just in traditional tariff targets.

As economist Phil Magness put it, tariffs effectively function like taxes. They raise costs somewhere in the system. Companies can absorb them for a time, but they don’t disappear.

Eventually, the cost gets passed along…

Bottom line: Imported goods cost more, domestic producers are raising prices alongside them, and consumers are absorbing a growing share of the bill.