A September 2026 study from the Federal Reserve Bank of New York The Anatomy of Tariff Pass-Through into Consumer Prices finds that tariffs do more than make imported goods more expensive. They also push up prices for many products made in the United States, which means the impact on consumers is broader and longer-lasting than many people realize.

The researchers examined the large U.S. tariffs introduced in 2025 and found that about 26% of the tariff increases were eventually passed on to consumers through higher prices. In other words, when tariffs rise, shoppers end up paying part of the cost.

The study found two main ways this happens.

First, tariffs directly raise the cost of imported goods. When importers pay more because of a tariff, most of that increase is passed along to consumers. This effect shows up relatively quickly.

Second, tariffs indirectly raise prices on domestically produced goods. Many American manufacturers rely on imported materials and components. When tariffs increase the cost of those inputs, domestic producers often face higher production costs. At the same time, they may face less competition from foreign products that have become more expensive, giving them greater room to raise prices.

The researchers estimate that roughly two-thirds of the consumer price increase comes from more expensive imports, while about one-third comes from these indirect effects on domestic producers.

Another important finding is timing. Prices for imported goods tend to rise almost immediately after tariffs are imposed. However, the effects on domestic goods often take nine to twelve months to work through supply chains and reach store shelves. As a result, tariff-related inflation can continue building long after the tariffs themselves are announced.

The study suggests that tariffs function much like a tax that is shared across the economy. While they may be aimed at imported products, some of the costs eventually reach consumers through higher prices on both imported and domestically produced goods.

The New York Fed’s research concludes that tariffs affect more than just imported goods. They also raise costs for domestic producers and can lead to higher prices throughout the economy. Because some of these effects take months to emerge, the full impact of tariffs on consumer prices may not become apparent until well after the tariffs are introduced.

Tariffs do not just make foreign products more expensive. They can also increase the prices of goods made at home, leaving consumers paying more across a wider range of products.

A Simple Example: Steel Tariffs and American Cars

Consider a tariff on imported steel.

Steel is a major input in automobile manufacturing. When a tariff raises the price of imported steel, U.S. automakers also face higher costs because they use steel to build vehicles. As the cost of production rises, manufacturers may respond by increasing the prices of cars and trucks.

At the same time, foreign automakers selling into the U.S. market are also affected by higher steel costs or by tariffs applied to imported vehicles and parts. With foreign competitors facing higher costs as well, domestic automakers may feel less pressure to keep prices low.

The result is that a tariff aimed at imported steel can lead to higher prices throughout the automotive sector. Consumers may end up paying more not only for imported vehicles, but also for cars and trucks assembled in the United States.

This example illustrates one of the study’s central findings: tariffs can affect prices well beyond the products directly targeted. The initial increase in the cost of imported steel ripples through supply chains, raising costs for domestic producers and ultimately pushing up prices for consumers. The Anatomy of Tariff Pass-Through into Consumer Prices finds that these indirect effects account for more than one-third of the total impact of tariffs on consumer prices.

A tariff on imported steel is not just a steel story. It can become a car-price story, an appliance-price story, and ultimately a consumer-price story.