From CNBC: 2025-04-10 13:32:00

President Donald Trump’s tariff agenda and trade war will lead to higher consumer prices by summer, according to economists. Tariffs are a tax on imports, paid by U.S. businesses, with some of the costs passed on to consumers. Consumers may lose $4,400 of purchasing power in the short term due to tariffs.

Economists note that federal inflation data doesn’t show much tariff impact yet. The specter of a global trade war may have had a “positive” impact on inflation, with lower energy prices amid fears of a global recession. Consumers can expect noticeably higher prices by May if tariff policies remain.

Food prices are expected to rise first due to perishability, while other physical goods like vehicles, electronics, clothing, and furniture will follow suit by Memorial Day. Retailers may gradually increase prices to mitigate backlash, with the true impact of tariffs reflected in prices by May and beyond.

Uncertainty surrounds President Trump’s tariff policy, with exceptions like Canada, China, and Mexico facing separate levies. Services like travel and entertainment could see prices fall due to retaliation from other nations or decreased foreign demand. Evidence of this was seen in steep declines in hotel prices and airline fares in March.

Read more: Tariffs, trade war inflation impact to be ‘pretty ugly’ by summer