Where Is the Tariff Inflation?
16th June 2025
For months, many, most, if not all economists have been predicting a re-inflation due to the tariffs imposed by the Trump administration. They are not small increases but dramatic increases that shattered a 70-year postwar run of low tariffs. Every bit of economic theory would suggest that the new taxes paid on imports by American businesses and consumers would feed into price increases.
Those price increases keep not happening.
The consumer price index (CPI) and producer price index (PPI) data came out last week. They once again underscored the point. Inflation is not dead but it has hit new lows relative to what we’ve been through for four years. Tariffs seem not to have made any difference at all.