A recent report from the Bureau of Labor Statistics shows that consumer and producer prices rose just 0.1% in May, marking a relatively benign reading for inflation. However, economists warn that the months ahead will likely see price increases driven by President Donald Trump’s desire to ensure a fair trade deal with global partners.
Despite widespread fears, tariffs have yet to drive up prices significantly, except in areas sensitive to higher import costs. Three key factors contributing to low inflation include companies hoarding imported goods before the tariff announcement, the time it takes for charges to materialize, and consumers tightening their belts.
This week’s data showed isolated evidence of tariff pressures, with canned fruits and vegetables seeing a 1.9% price increase, while durable goods like major appliances rose 4.3%. Economists warn that these gains may be temporary, but the impact of tariffs will likely become more apparent in the coming months.
Consumers are seen as a crucial factor in determining whether inflationary pressures will be short-lived or persistent. As nearly 70% of economic activity is driven by consumer spending, their behavior will play a significant role in shaping future price trends.
Source: https://www.cnbc.com/2025/06/12/here-are-the-three-reasons-why-tariffs-have-yet-to-drive-inflation-higher.html