Re: Costs of the tariffs are now arriving
Posted: Thu Jun 05, 2025 7:51 am
per Axios:
"Tariffs have yet to show up in the inflation numbers. But every indication is that price hikes are coming or are already here, and more are on the way. Per Axios:
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State of play: Surveys and anecdotes about price increases are piling up.
"Tariffs have increased the cost of doing business," a firm in transportation and warehousing said in the comments of yesterday's Institute for Supply Management report on activity in the service sector.
A clothing retailer told the Boston Fed it took a "rare step" of retagging its inventory "with higher prices to cover the cost of tariffs, and those items will hit store shelves this summer," per yesterday's Beige Book release.
Tariff-related price hikes appear to be hitting the shelves at Walmart and Target as well, Business Insider reported this week. Employees have been posting pictures of certain products showing sharp increases.
Zoom in: About three-fourths of companies said they were either fully or somewhat passing along higher tariffs by raising prices, per a survey of businesses out yesterday from the New York Fed.
The survey was conducted among manufacturers and service firms early last month, before President Trump lowered tariffs on Chinese imports to 30% from 145%.
While this is a regional survey of New York and New Jersey firms, the authors indicated that these are trends observed nationwide.
The intrigue: "A significant share" of firms surveyed said they raised prices of goods and services unaffected by tariffs, as a way to spread higher costs across inventory, or to take advantage of customer expectations that prices are rising.
It's a phenomenon we've seen before. After the first Trump administration raised tariffs on washing machines, the price of dryers — unaffected by tariffs — also went up, as companies took advantage of the moment.
"A big increase in the tariff level is a perfect opportunity for companies to use a price shock to raise prices," Alex Jacquez, an economist who served in the Biden White House, said on a press call yesterday."
I suppose we could start using a new term, 'tariff sympathy price increases'
https://www.axios.com/2025/06/04/trump-tariffs-prices