Impact of Tariffs Starting to Show in Consumer Prices

As the calendar inches Americans closer to the holiday shopping season, many businesses are becoming more explicit about price increases as they move to offset the higher cost of imported goods. Official data and statements from companies indicate accelerating price increases, especially from companies that are dependent on imported goods or inputs now that many companies have sold off inventories, the Financial Times reported. In the six months leading up to August, prices for audio equipment rose 14 percent, coffee was up 13 percent, and women’s dresses up more than 8 percent.

Many businesses used a variety of tactics to curb the impact of tariffs in the first half of the year. But they are now looking to raise prices on products and pass on more of the tariff costs to consumers, especially as the full impact of tariffs are increasingly being felt. Many companies stockpiled goods earlier in the year to beat the initial tariffs but have now depleted their inventories. Citigroup’s economist estimates that companies will push a greater share of the tariff burden onto consumers – about 60 percent compared to the earlier split of 30-40 percent for customers and the remaining 60 percent split between the company and the supplier, IndexBox Market Intelligence Platform reports.