Import tariffs that took effect in January and February 2026 have raised goods prices an estimated +1.4% from the December 2025 baseline, per Goldman Sachs research. The full tariff schedule, if fully passed through to consumers, would imply roughly +2.2% on goods categories, suggesting retailers and importers are absorbing about 40% of the cost in margins so far.
The pass-through rate varies by sector. Consumer electronics, heavily import-dependent, show near-full pass-through. Apparel is lower; major retail chains have been moving sourcing to non-tariffed countries since 2025 and holding some price. Household goods sit in the middle. Food is largely insulated because most food consumed in the US is domestically produced; exceptions are coffee, cocoa, and some produce.
The macro question is whether this is a one-time level shift or generates second-round effects through wage demands and inflation expectations. Current inflation expectations (5-year breakevens, Michigan Survey) have risen modestly but remain anchored compared to 2021-22. The Fed is treating the tariff impact as a supply shock rather than demand-driven inflation, which implies a higher tolerance for above-target prints in the near term.