The Slow Burn of Trump Tariffs: Why Inflation Isn’t Hitting Consumers Yet

The TRUMP administration's latest round of tariffs presents an economic puzzle. Despite imposing nearly 20% higher costs on imported goods, wholesale and retail prices have yet to reflect the full impact. The discrepancy lies buried in global supply chains, where importers are creatively mitigating the blow.

New data from Capital Economics reveals the actual tariff rate paid in June was just 9%, far below the estimated 15%. US companies are adapting swiftly—shifting sourcing strategies and product mixes to soften the tariffs' sting. This maneuvering buys time before consumer prices inevitably rise.

Research groups like the Yale Budget Lab track the tariff rate's volatile trajectory, from 2.5% pre-Trump to a peak of 28% in April. The current 19% average reflects the administration's erratic trade policy: threats made, taxes imposed, deals announced, and minds changed. Each fluctuation sends ripples through markets as investors scramble to assess winners and losers.