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Report
The Impact of Global Shipping Cost Surges on US Import Price Inflation
Global shipping costs have soared to record highs in recent years. Costs spiked during the COVID-19 pandemic, driven by supply chain disruptions, labor shortages, and port congestion. Costs had eased by mid-2023, but they began rising again later that year and into 2024 due to Houthi violence off the coast of Yemen that restricted access to the Suez Canal and a drought at the Panama Canal that limited vessel traffic and forced rerouting around the Cape of Good Hope. As global shipping costs have soared, US import prices also have increased.
Report
The Impact of Tariffs on Inflation
This brief introduces a new methodology that quantifies how price increases at the border transmit to US consumers. The methodology allows the authors to determine the share of US consumption that would be subject to such increases and to break them down into different country and industry sources. Among other applications, the methodology enables the authors to compute the effects of various tariff plans on consumer price inflation, as tariffs effectively increase the border prices of imported goods.
Working Paper
Pass-Through Beyond the Border: Oligopoly, Networks, and Tariffs
We develop a multisector open-economy model that maps border price shocks into US producer and consumer prices through imported inputs, domestic production networks, and competition with foreign suppliers. The framework, which we apply to the 2025 US tariffs, accommodates pass-through in either levels or logs and maps directly to public data on input–output linkages, trade, and prices. Allowing firms to respond to the prices of competing imported varieties substantially improves the model’s fit to producer prices, and the resulting model is also consistent with the consumer-price ...
Working Paper
What Imports to Import Prices?
This study offers new insights into exchange rate pass-through (ERPT) using U.S. import price indexes by country-of-origin, covering two decades of monthly data. Focusing on the largest U.S. trading partners, our analysis shows that ERPT is more muted than previously estimated, with freight costs having no measurable impact on import prices and foreign production costs exerting only limited influence. We also observe significant heterogeneity in countries’ short-run responses, shaped by differences in trade composition and pricing strategies. Consistent estimates across common dynamic panel ...
Working Paper
Missing Import Price Changes and Low Exchange Rate Pass-Through
A large body of empirical work has found that exchange rate movements have only modest effects on inflation. However, the response of an import price index to exchange rate movements may be underestimated because some import price changes are missed when constructing the index. We investigate downward biases that arise when items experiencing a price change are especially likely to exit or to enter the index. We show that, in theoretical pricing models, entry and exit have different implications for the timing and size of these biases. Using Bureau of Labor Statistics (BLS) microdata, we ...
Working Paper
\"It's Not You, It's Me\" : Breakups in U.S.-China Trade Relationships
Costs to switching suppliers can affect prices by discouraging buyer movements from high to low cost sellers. This paper uses confidential U.S. Customs data on U.S. importers and their Chinese exporters to investigate these costs. I find considerable barriers to supply chain adjustments: 45% of arm?s-length importers keep their partner, and one-third of switching importers remain in the same city. Guided by these regularities, I propose and structurally estimate a dynamic discrete exporter choice model. Cost estimates are large and heterogeneous across products. These costs matter for trade ...
Working Paper
Import Source Reallocation and Aggregate Price Dynamics in the United States
This paper studies the impact of changes in the composition of U.S. import sources on aggregate import prices and their implications for consumer prices. We decompose import price changes into within-source price adjustments and changes in sourcing composition. Using bilateral import data, we find that sourcing from lower-cost suppliers, particularly China, put sustained downward pressure on aggregate import prices until the mid-2010s. Since then, shifts away from China have partially reversed this effect, raising both import and consumer prices. We also find sourcing reallocation responds ...
Discussion Paper
Who Is Paying for the 2025 U.S. Tariffs?
Over the course of 2025, the average tariff rate on U.S. imports increased from 2.6 to 13 percent. In this blog post, we ask how much of the tariffs were paid by the U.S., using import data through November 2025. We find that nearly 90 percent of the tariffs’ economic burden fell on U.S. firms and consumers.
Discussion Paper
How Fast Do Tariffs Pass Through into Consumer Prices?
There has been a lot of interest in how tariffs affect consumer prices (for example, Cavallo et al. 2021, 2025). In this post, we present results from our new research paper that estimates the effects of the 2025-26 tariffs on retail consumer prices. We find that for every percentage point increase in average tariffs, consumer goods prices increase by about a quarter of a percent after one year. Roughly two-thirds of the effect arises because tariffs raise the prices of imported consumer goods. The remaining third arises indirectly: tariffs increase the prices of goods made in the U.S. ...
Discussion Paper
Consumer Goods from China Are Getting More Expensive
We find that, in a sharp reversal of earlier trends, U.S. import prices for consumer goods shipped from China have been rising rapidly in recent quarters—by 7 percent between 2010:Q2 and 2011:Q1. In this post, we track U.S. import price movements in Chinese goods in different product categories by creating an import index that uses highly disaggregated data. We also consider the likely causes of the recent rise in prices for consumer goods. If these price hikes persist, they could have important consequences for U.S. businesses and consumers because China is the largest single supplier of ...