Yes – Tariffs Have Increased Prices and Inflation in the US

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Recent US inflation data for the month of April came in low at 0.1% (2.1% over the last 12 months). However, after the US tariffs announcement at the beginning of April, economists had warned that inflation in the US will be higher. Given the inflation data came in ‘low’, some have argued that this demonstrates that tariffs do not push inflation up. This interpretation is incorrect. A more in-depth look by economists shows us how the tariffs have already increased prices of both imported goods and domestic goods.

Direct Retail Data

Data

Cavallo, Llamas and Vazquez (2025) (“CLV”) looked at the impact of US tariffs directly on store retail prices. PriceStats, a private data firm, collects daily prices of goods by scraping online price information of large US retailers. CLV focused their analysis on 4 large US retailers and collected price data on specific products.

Next, CLV matched the products in their data set to the country of origin of the product. Of the 4 retailers, 2 retailers listed the country of origin of their product on their website. This allowed CLV to determine the country of origin for around 300,000 products. For the remaining 2 retailers, CLV relied on a generative AI prediction model that would search online to determine the country of origin of the product. CLV found that this procedure correctly predicted whether a good is “Domestic” or “Imported” 88% of the time, and can predict the specific country correctly 85% of the time. The prediction method was still only applied to 10% of the sample, resulting in a total of around 330,000 products for which both prices and the country of origin information