Survey finds nearly half of U.S. firms plan further price increases tied to import taxes

The Federal Reserve Bank of New York said 47 percent of service firms and 44 percent of manufacturers plan additional price increases linked to import taxes. Thirty-one percent of service firms and 37 percent of manufacturers expect to implement those increases within the next six months.

Some businesses are holding off on price changes because they remain bound by contracts with fixed selling prices. Others are using a staggered approach, raising prices gradually to recover tariff costs without immediate consumer backlash.

Pricing strategies observed The New York Fed described the gradual method as allowing firms to adjust costs over time and retain flexibility if tariff rates change. One example cited is a spice company that described its price adjustments as surgical and reported tariff refunds helped protect margins.

Tariff implementation and consumer effects The administration has replaced earlier tariff measures struck down by the Supreme Court with temporary levies under Section 122 of the 1974 Trade Act and Section 301. The U.S. Trade Representative began a three-day hearing on Tuesday to assess whether 60 countries investigated in March failed to prevent exports of forced-labor products.

A May study from the Federal Reserve Bank of Dallas attributed a 3.2 percent year-over-year core inflation rate in March to tariff costs. Economists estimated that without the levies, inflation would have been about 0.8 percentage points lower. A February Tax Foundation projection estimated tariffs would cost American households an average of $700 in 2026.

Separate Federal Reserve research published in April indicated consumers may feel the full effects months after companies first absorb higher acquisition costs.