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<\/p>\n Email Link<\/p>\n New York \n Tariffs are fueling a significant chunk of price hikes across the economy, according to a survey of executives released Wednesday.\n <\/p>\n \n Chief financial officers estimate tariffs are to blame for about one-third of their companies\u2019 price growth this year, according to The CFO Survey issued by Duke University and the Federal Reserve Banks of Richmond and Atlanta.\n <\/p>\n \n So, inflation<\/a> could have been about a third lower this year without President Donald Trump\u2019s historically high tariffs.\n <\/p>\n \n That\u2019s nothing to sneeze at. If the latest inflation reading<\/a> of 2.9% were a third lower, it would be essentially right at 2% \u2013 the level the Federal Reserve targets for price increases that are neither too hot or too cold.\n <\/p>\n \n The findings stand in stark contrast with Trump\u2019s frequent claims that there is \u201cno inflation\u201d and that his aggressive trade strategy is not causing price hikes.\n <\/p>\n \n The survey also undermines the argument that tariffs will simply be a one-time price adjustment.\n <\/p>\n \n CFOs estimate tariffs will account for about a quarter of price increases next year, too.\n <\/p>\n \n \u201cThis isn\u2019t a one-time thing. It is still going to be happening in 2026. This is going to be a long-drawn-out affair,\u201d John Graham, a finance professor at Duke\u2019s Fuqua School of Business and the director of The CFO Survey, told CNN in a phone interview.\n <\/p>\n \n Graham added that tariff-driven price hikes will likely linger into 2027 as well, although that wasn\u2019t asked in the survey.\n <\/p>\n \n Nearly a quarter of the businesses surveyed reported they will cut spending this year due to tariffs.\n <\/p>\n \n Tariffs are making it more expensive for businesses to import goods, components and raw materials. On average, CFOs estimate their costs will increase by 4.4% this year \u2014 about 1.7 percentage points of that increase is driven by tariffs.\n <\/p>\n \n The survey suggests they plan to pass along a significant chunk of those higher costs to customers.\n <\/p>\n \n A slew of major companies have announced plans to increase prices on some items due to tariffs, including Walmart, Target, Hasbro, Nike, Mattel, Stanley Black & Decker and Procter & Gamble. The CFO survey found that price increases this year are expected to reach 3.9%, with tariffs accounting for 1.3 percentage points of that jump.\n <\/p>\n \n During a press conference<\/a> last week, Fed Chair Jerome Powell noted that while the \u201cpass-through\u201d of tariffs into prices has been \u201cslower and smaller than we thought,\u201d it\u2019s likely not over yet. Powell said the Fed anticipates inflation will continue to rise, though \u201cmaybe not as high\u201d as expected.\n <\/p>\n \n Powell noted that goods prices generally fell over the past 25 years, outside of the Covid-19 pandemic. But that trend has reversed this year after Trump took office, likely because of tariffs.\n <\/p>\n \n Some goods and services exposed to tariffs, such as jewelry and car repairs, have rapidly gone up in price.\n <\/p>\n \n For instance, most coffee consumed in the United States is imported from Brazil, a country now facing 50% tariffs from the Trump administration. Coffee prices spiked by 4% between July and August, the biggest monthly increase in 14 years, according to the Bureau of Labor Statistics. Coffee was nearly 21% more expensive compared to the same month last year \u2013 the largest annual jump since 1997<\/a>.\n <\/p>\n \n Tomato prices also climbed by 4% in August, the most since the pandemic. Most tomatoes imported from Mexico face 17% tariffs<\/a> from the Trump administration that kicked in over the summer.\n <\/p>\n \n Powell\u2019s newest colleague, Fed Governor and White House economist Stephen Miran<\/a>, has argued worries about price hikes caused by trade policy are overblown.\n <\/p>\n \n \u201cWith respect to tariffs, relatively small changes in some goods prices have led to what I view as unreasonable levels of concern,\u201d Miran, a staunch Trump ally, s\ufeffaid in a speech<\/a> on Monday at the Economic Club of New York.\n <\/p>\n \n Miran, who joined the Fed last week, said he expects \u201cexporting nations will have to lower their selling prices\u201d to absorb the cost of tariffs.\n <\/p>\n
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