Why Haven’t Tariffs Boosted Inflation? This Theory Is Gaining Traction

The highest tariffs in almost a century haven’t caused inflation to surge. The phenomenon has puzzled economists, some of whom suspect that companies have so far simply been reluctant to pass along the extra costs to their customers. In a new study, Barclays economists went through census data to see what tariffs importers actually paid in May. They found that the weighted-average tariff rate—the average of all tariffs, adjusted for import volume from each country—that month was around 9%.

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