"After all, the effective tariff rate on goods imported from China was as high as 57.6% in November 2025, according to the Peterson Institute for International Economics. Surely this would force up the price of goods for consumers? Nope, according to two new studies. That's because importing companies tend to find ways around the tariffs, or because countries negotiate enough compromises and exemptions to the tariffs to reduce the headline rate."
"Both studies showed tariffs hurt economic growth and increase unemployment. But in terms of inflation, they were more benign than expected. In fact, U.S. government revenue from Trump's tariffs is already in decline, according to a research note from Pantheon Macroeconomics on Tuesday. That suggests their effect on inflation will get weaker as time goes by. Tariff revenues peaked at $34.2 billion in October and then declined to $32.9 billion in November and $30.2 billion in December, Pantheon's data shows."
The U.S. Bureau of Labor Statistics reported consumer price inflation at 2.7%, below Wall Street's 3.1% forecast. Economists expected Trump's high tariffs on Chinese imports to raise consumer prices because effective tariff rates reached 57.6% in November 2025. Two studies from the Federal Reserve Bank of San Francisco and Northwestern University find tariffs historically have not produced large inflation spikes because importers often circumvent tariffs or secure exemptions and compromises. Both studies find tariffs reduce economic growth and raise unemployment. U.S. tariff revenue has declined from a $34.2 billion peak, suggesting weakening inflationary impact over time.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]