Nearly half of businesses that paid tariffs over the past year still plan to raise prices further to cover those costs, with some delays stretching six months or more into the future. That's according to new regional business surveys from the Federal Reserve Bank of New York, published today, which reveal that tariff-induced price increases continue working their way through the economy more than a year after sweeping tariffs reshaped U.S. trade policy. The findings suggest that inflationary pressures from tariffs won't end anytime soon, even as businesses gradually pass along higher import costs to their customers.
The surveys tracked how businesses that directly paid tariffs have responded to these costs. Among service firms that paid tariffs, 47 percent said they have more tariff-induced price increases coming, while 44 percent of manufacturers reported the same. Breaking that down further, roughly 30 percent of tariff-paying service firms plan additional price increases within the next six months, as do nearly 40 percent of manufacturers. But the delays extend even longer for some: 16 percent of service firms and 7 percent of manufacturers said they plan tariff-related price hikes more than six months from now. On the flip side, just over half of tariff-paying firms indicated they're done raising prices to recoup tariff expenses—either because tariffs had little cost impact (3 percent of service firms, 8 percent of manufacturers), they've already fully passed through costs (roughly 30 percent of service providers, 20 percent of manufacturers), or they don't plan further hikes regardless of tariffs already paid (20 percent of service firms, 30 percent of manufacturers).
The report also documents how widespread tariff exposure has become among U.S. businesses. Two-thirds of service firms and almost all manufacturers responding to the surveys import at least some of their inputs, according to the New York Fed researchers. Among these importing firms, 40 percent of service businesses and 70 percent of manufacturers said they directly paid tariffs over the past twelve months, though many others faced higher costs indirectly when suppliers passed along their own tariff expenses. The authors note that "recent research has shown that nearly 90 percent of the economic burden of tariffs has fallen on U.S. firms and consumers," underscoring who's actually bearing these costs.
Why are businesses still planning price increases so far out? The report points to two main explanations. First, some businesses operate under contracts with fixed selling prices and can't raise prices until those contracts expire, forcing them to eat the cost increases temporarily. Second, some firms are taking what the authors call a "trickle up" approach—gradually raising prices over time instead of hitting customers with sharp, sudden increases all at once. This strategy lets businesses avoid sticker shock while keeping the option to speed up price hikes if costs keep climbing. The report also suggests that uncertainty around future tariff policies—whether rates might change, exemptions could be granted, or other countries might retaliate—is pushing some firms toward cautious, incremental pricing rather than big, one-time adjustments.
The New York Fed's findings challenge the notion that tariff-related price increases represent a quick, one-time bump. Instead, the authors write that "in an ever-changing tariff environment, many firms are spreading price increases across extended periods—meaning that inflationary pressures due to tariffs may well last for some time to come." The adjustment process has been gradual, matching a growing body of research showing that tariffs pass through to consumer prices incrementally over most of a year rather than immediately. With businesses still working through cost adjustments more than twelve months after tariffs were introduced—and with some price hikes planned half a year or more into the future—the economic ripple effects of trade policy are proving to be a long, slow wave rather than a single splash.