BLACK mobile logo

california

community

Inflation Could Be a Third Lower Without Tariffs, Financial Decision Makers Say

September 25, 2025

The recent CFO Survey by Duke University and Federal Reserve Banks reveals that tariffs are responsible for approximately one-third of company price increases in 2024, contradicting former President Trump's claims that his trade policies aren't causing inflation. Business executives report that tariff impacts will persist, accounting for about a quarter of price increases in 2025, and likely continuing into 2026 and 2027. The survey indicates companies are passing significant portions of tariff costs to consumers, with nearly one-quarter of businesses planning to reduce spending due to these trade policies.

Who is affected

  • Consumers facing higher prices on goods like coffee and tomatoes
  • Businesses experiencing increased import costs (estimated 4.4% cost increase this year)
  • Companies like Walmart, Target, Hasbro, Nike, Mattel, Stanley Black & Decker, and Procter & Gamble that have announced price increases
  • Businesses allocating resources to manage tariffs (equivalent to 2-3 full-time employees in one case)
  • Companies that can only adjust prices annually while facing fluctuating costs

What action is being taken

  • Businesses are passing along a significant portion of tariff costs to customers (contributing 1.3 percentage points to the expected 3.9% price increase this year)
  • Nearly a quarter of surveyed businesses are cutting spending this year due to tariffs
  • Companies are actively tracking, identifying, and charging customers for tariff-related costs
  • The Federal Reserve is monitoring tariff pass-through effects on inflation
  • Businesses are absorbing some tariff costs that they cannot immediately pass to customers

Why it matters

  • Inflation could have been approximately one-third lower without the tariffs, potentially reaching the Federal Reserve's 2% target instead of the current 2.9%
  • The tariff effects are not a one-time adjustment but will continue into 2025 and beyond
  • Tariffs and trade policy remain the top concern for CFOs for the third consecutive quarter
  • Specific goods heavily affected by tariffs are seeing significant price increases (coffee prices jumped 21% year-over-year, the largest annual increase since 1997)
  • The data contradicts claims that there is "no inflation" from tariffs or that exporting nations are absorbing most tariff costs

What's next

  • No explicit next steps stated in the article

Read full article from source: The San Diego Voice & Viewpoint