The Surprising Tariff Lesson Buried in Inflation Data
Businesses tend to shield consumers from outsized price gains — at least for a time.
Price check.
Photographer: David Paul Morris/Bloomberg
If the Trump administration’s tariff policies result in higher overall inflation, a scenario that will play out in the coming weeks, the question is who will pay for it. A surge in prices will presumably raise the cost of doing business. Less clear is whether and to what extent companies will pass on those higher costs to consumers.
Any inflationary impact from tariffs should first show up in the Producer Price Index, which reflects changes in the cost of producing goods and services sold to consumers. Over time, producer inflation is passed on to consumers and shows up in the better-known Consumer Price Index.