Authors: Mary Amiti, Sebastian Heise, and David E. Weinstein
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Staff Reports
The Anatomy of Tariff Pass-Through into Consumer Prices
Number 1201
August 2026
August 2026
JEL classification: E31, F13, F14
Tariffs raise the prices of goods made at home, not just the imports they tax—an effect that standard pass-through estimates largely miss. Studying the 2025 U.S. tariffs, we find that about 26 percent of the tariff increase passes through to consumer prices. These estimates are measured relative to less-exposed goods and hold aggregate conditions fixed. The direct effect accounts for 64 percent of this increase, as tariffs raise the consumer prices of foreign varieties of a good. The remaining 36 percent arises indirectly—tariffs raise the cost of imported inputs used by U.S. producers, and domestic producers raise their markups because they face less competition from higher-priced imports. The direct effect passes through quickly, since tariffs raise import prices almost immediately, but the indirect effect takes nine to twelve months to work its way through supply chains. As a result, tariffs have a larger and more drawn-out impact on consumer prices than the direct effect alone would suggest.
Author Disclosure Statement(s)
Mary Amiti
The author declares that she has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
Sebastian Heise
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
David E. Weinstein
I declare that I have no relevant or material financial interests that relate to the research described in this paper.
The author declares that she has no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
Sebastian Heise
I declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports.
David E. Weinstein
I declare that I have no relevant or material financial interests that relate to the research described in this paper.
Suggested Citation:
Amiti, Mary, Sebastian Heise, and David E. Weinstein. 2026. “The Anatomy of Tariff Pass-Through into Consumer Prices.” Federal Reserve Bank of New York Staff Reports, no. 1201 August. https://doi.org/10.59576/sr.1201
Amiti, Mary, Sebastian Heise, and David E. Weinstein. 2026. “The Anatomy of Tariff Pass-Through into Consumer Prices.” Federal Reserve Bank of New York Staff Reports, no. 1201 August. https://doi.org/10.59576/sr.1201
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