U.S. consumers’ tariff fears may soon come to fruition, as businesses will start passing off more of the tariff price hits directly onto buyers, according to a new report.
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Through June, about 22% of tariff costs have been passed onto consumers, according to a Goldman Sachs analysis shared with Bloomberg. However, that number will rise to 67% if tariffs follow the same course as years prior, the firm said.
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The core personal consumer expenditure index — which measures the rate of inflation for prices of goods and services for U.S. consumers, minus food and energy — was at a rate of 2.8% in June. Goldman analysts said in the report that the CPE will rise to 3.2% year-on-year in December. They added that when taking away the additional costs from tariffs, the inflation rate would have been 2.4%. So far, the analysts said tariffs have increased this index by 0.2% and expect it to rise 0.16% for July and 0.5% for the rest of 2025.
Tariff-induced hikes to the rate of inflation come as Federal Reserve Chair Jerome Powell has repeatedly rejected President Donald Trump’s demands to lower interest rates. In the president’s most recent move against Powell, he appointed a fellow critic to a key seat at the central bank.
The Federal Reserve has voted five times this year to keep interest rates at the same benchmark 4.25% to 4.5% range. Powell has said Fed officials want to better determine the impact of the tariffs through the economy before cutting interest rates. The decisions have ignited fury from Trump, who argues the Fed is keeping a lid on economic growth.
Goldman analysts said in the report that U.S. businesses have absorbed about 64% of tariff-related costs. Companies like Apple reported a $800 million hit from tariffs and automaker GM reported tariff-related costs of over $1 billion in their respective earnings last quarter. The analysts expect that, moving forward, companies will pay less than 10% for tariff costs. They added that international exporters have taken on about 14% of tariff costs through June, but that rate could increase to 25%.
Commerce Secretary Howard Lutnick said in a Thursday interview with Fox Business that the U.S. economy gained about $30 billion in tariff revenue last month. He predicts that number to increase to $50 billion per month as more tariffs take effect.
New tariff rates on nearly 70 countries went into effect last week. But as President Trump has shown he is willing to abruptly change his mind on existing trade deals — as he did with Mexico and Canada — getting a grasp on exactly how much tariffs will impact U.S. consumers could prove to be difficult.
—Joseph Zeballos-Roig and Jennifer Ortakales Dawkins contributed to this article.