Transcript

Tariffs. They've been dominating headlines since April. But behind those headlines are real numbers and real consequences. So what does the data actually tell us about their impact from global trade deals? The prices you pay at the store? How are tariffs shaping the economy? Let's take a look. We all know what tariffs are at this point, but how are they actually playing out? It's been a big year for tariffs. This summer, tariffs on imports hit their highest point in decades. In theory, higher tariffs can create incentives to produce more at home, but so far the data doesn't show much movement there. What we do see is a growing stream of revenue for the government. As of August, the US government collected about $146 billion in import tariffs. That's nearly double last year's total. It's a huge figure, but it doesn't come without its trade-offs. Tariffs don't just raise revenue, they raise costs too. Tariffs can act a lot like a tax. When companies pay more to import materials, that cost often gets passed down to the consumer, and we can see that impact in prices. Typically, goods prices tend to decline overtime as production technology improves and supply chains become more efficient, and this was the case in 2024. But we are now starting to see goods prices pick up in 2025. CPI data shows that everyday items like apparel and home furnishings, as well as durable goods like appliances and vehicles, they're now more expensive than they were a year ago. So even as overall inflation has remained moderate, cost pressures from tariffs may be helping to keep goods inflation sticky. One more thing to keep in mind as we try to understand tariffs. The headlines don't always match reality, and at least not right away. Observed tariff rates, the ones actually being applied, are still lagging behind the announced rains, the ones that make the news. The take away? Try not to overreact to the first number you see. Economic policy moves fast, but its effects can move slowly. The data show that many of these announced tariffs haven't fully filtered through yet, meaning there's still uncertainty about the total impact. So while smart to stay informed, it's just as important to take a breath and let the data tell the real story. When we talk about tariffs, it's easy to feel overwhelmed. But don't tune out. They influence the prices we pay, what ends up on store shelves, and how far our money stretches. I'm Michelle Meyer, thanks for tuning in to your personal economist. See you next time.