New York Fed Finds Tariff-Driven Price Hikes Will Stretch Past 2026

More than a year after the first tariffs of the current Trump administration were implemented, about half of companies are still raising prices to pass through those costs to consumers, New York Fed economists wrote in a Wednesday (July 8) blog post.

A New York Fed survey found that among service firms that have paid tariffs, 31% plan to increase their prices in response to tariffs within the next six months and another 16% plan to do so more than six months from now, according to the post.

Among tariff-paying manufacturers, 37% plan to raise prices within six months and another 7% plan to do so more than six months from now.

Businesses gave two main reasons for their plans to raise prices in the future: they operate under contracts that prevent them from raising prices until the contract expires or they have chosen to raise prices gradually over time to avoid shocking their customers with an immediate increase that covers all of their tariff costs, according to the post.

“Moreover, uncertainty surrounding future tariff policies — including potential rate changes, exemptions or tariff responses from other countries — may be causing some firms to adopt cautious, incremental pricing strategies rather than making large, discrete adjustments,” the New York Fed economists wrote in the post. “This behavior extends the period over which tariff-related price pressures work their way through the economy.”

The New York Fed survey found that two-thirds of service firms and almost all manufacturers import at least some of their inputs. Among these firms, 40% of service firms and 70% of manufacturers said they directly paid tariffs over the previous 12 months.

Among those that paid tariffs directly, 29% of service firms and 18% of manufacturers said they had fully passed through tariffs to customers by raising prices, 21% of service firms and 30% of manufacturers said they do not plan additional price hikes, and 3% of service firms and 8% of manufacturers said tariffs had little impact on their costs, per the post.

The New York Fed said in June 2025, about two months after tariffs took root, that three-quarters of companies across service and manufacturing industries had passed along their higher inputs costs on tariffed goods to end consumers.

In February 2025, the New York Fed said foreign exporters were paying a growing share of the cost of new tariffs, though U.S. importers continued to pay for most of that cost. As of November 2025, foreign exporters were paying a 14% share of the cost of tariffs, while U.S. importers were paying 86%.

The PYMNTS Intelligence report “How Middle-Market Business Uncertainty Rewrote 2025” found that larger companies were better able than smaller ones to raise prices and drop underperforming products to cushion the impact of tariffs.