How Much of a Tariff Actually Reaches the Shelf Price

If you have ever tried to work out what a tariff does to the price of something you buy, you have run into one number you cannot look up: how much of the tariff the seller actually hands to you. The tariff rate is public. The share that survives the trip from the port to the shelf is not.

Most people guess all of it. That guess turns out to be the right answer eventually and the wrong answer for the first half year or so, and the size of the error is big enough to matter on anything you are actually deciding about.

The 2025 US tariffs were large enough and sudden enough that four separate teams went and measured this properly. Their numbers are below, along with what to do when two of them disagree.

The one number nobody can look up

Our tariff cost passthrough calculator does the arithmetic in two steps. The import cost times the tariff rate gives the tariff cost per unit, so $20 of wholesale cost at a 25 percent tariff is $5 of duty. Then that $5 gets multiplied by a passthrough percentage to give the price increase.

The passthrough slider is the judgement call, and it defaults to 100 percent. At that setting the shelf price goes up by exactly the $5 of duty, which means the seller keeps the same number of dollars of margin as before. Push the slider above 100 and you are modelling a seller who keeps the same percentage markup instead, which requires a bigger price rise than the duty itself.

That distinction is not something we invented for the interface. It is the same fork the Federal Reserve Board's own researchers use as their benchmark, which makes the studies below unusually easy to translate into a slider position.

Almost nothing was absorbed abroad

Start with the easy part. One common hope was that foreign exporters would cut their prices to keep US buyers, swallowing the tariff before it ever became a US cost.

They mostly did not. Mary Amiti, Chris Flanagan, Sebastian Heise and David Weinstein at the New York Fed put the foreign share at 6 percent for January through August 2025, 8 percent for September and October, and 14 percent by November, leaving US importers with the other 86 to 94 percent. Their summary is that "nearly 90 percent of the tariffs' economic burden fell on U.S. firms and consumers."

So the interesting question is not whether the tariff entered the US economy. It is where it stopped once it got here, somewhere between the importer's margin and your receipt.

About a quarter of the tariff rate showed up on the shelf

Alberto Cavallo, Paola Llamas and Franco Vazquez tracked daily prices from five large US retailers between October 2024 and October 2025, matching 359,104 products to a country of origin and a 10-digit tariff code. Their working paper reports that "retail tariff pass-through reached 24 percent, contributing about 0.76 percentage points to the all-items Consumer Price Index by October 2025."

In raw price terms, imported goods in their sample ran about 6.2 percent above where pre-tariff trends said they should be, and domestic goods 3.6 percent above. The average tariff those products actually paid, after exemptions, was 23.8 percent.

Amiti, Heise and Weinstein reached a strikingly similar figure by a completely different route, building a concordance from CPI items to the imports and domestic industries that supply them. Their staff report finds "about 26 percent of the tariff increase passes through to consumer prices," of which 64 percent is the direct effect on imported goods and 36 percent comes indirectly, through pricier imported inputs and through domestic producers raising markups once their foreign competition got expensive.

Two teams, two data sources, a quarter of the tariff rate either way. That part looks settled.

Where the studies stop agreeing

A quarter of the tariff rate is not the same thing as a quarter of the tariff dollars, because the imported content of a product is only part of what you pay at the register. Converting one into the other needs an assumption, and this is where the numbers split.

Cavallo and colleagues make theirs explicit: "assuming full pass-through at the border and a 50 percent import cost share at the retail level, our results suggest that U.S. consumers paid up to 43 percent of the tariff burden, with the rest absorbed by U.S. firms."

Robert Minton, Madeleine Ray and Mariano Somale at the Federal Reserve Board get a much higher answer. Working from monthly price data across 59 core goods categories, their April 2026 analysis concludes that "tariff pass-through is stabilizing around 100% and takes 5 to 9 months to occur." Their 100 percent benchmark is defined as the case where "prices of affected imports at the port of entry increase by the full amount of the tariffs, and domestic producers, wholesalers, and retailers maintain constant dollar margins (rather than constant percent markups)."

That benchmark is exactly our slider at 100. So the honest state of the evidence is that one careful team says consumers took roughly 43 percent of the dollars, and another says essentially all of them.

The two are not measuring quite the same window. Cavallo's data stops at 1 October 2025, seven months in. The Fed Board's runs through February 2026 and finds the number still climbing at five months before it settles. Some of the gap is timing rather than disagreement, but not all of it, and averaging them would hide the part that is real.

Time moves the number more than the retailer does

Everyone who looked at the month-by-month pattern found the same shape, which is a slow ramp rather than a jump.

Sinem Hacıoğlu-Hoke, Sarojini Malladi and Leo Feler used purchase records from up to 200,000 US households, weighted heavily toward groceries and health and beauty products. They found that "retail prices do not significantly react immediately after tariff announcements, roughly until August," with Chinese-origin goods ending December about 8.5 percent above a year earlier. Their conclusion is blunt: "tariffs do not appear as a one-time price spike, but rather as a pattern of gradual and slow adjustments to retail prices that US consumers see on store shelves."

The New York Fed team explains why the tail is so long. "The direct effect passes through quickly, since tariffs raise import prices almost immediately, but the indirect effect takes nine to twelve months to work its way through supply chains."

Cavallo, Llamas and Vazquez listed the delaying tactics in a plain-language writeup where they measured "roughly 14 to 20 percent of the tariff changes were reflected in retail prices within six months": margin reductions, inventory bought in before the tariffs landed, and re-sourcing to dodge the duty. None of those last forever.

The practical version: if the tariff is a few months old, use something in the 40s. If it has been in place close to a year, use 100 and expect to be roughly right.

The category matters more than the slider

Averages hide a lot here. Cavallo and colleagues found the biggest deviations in household furnishings and miscellaneous goods, both heavily sourced from China. Food, which is mostly domestic, and electronics, which were largely exempted, barely moved.

They also found that cheaper versions of a product rose faster than expensive ones, which they read as thin-margin sellers having less room to absorb anything. If you are pricing a budget item, the high end of the range is the better guess.

And domestic alternatives are not the escape hatch they look like. Alex Durante at the Tax Foundation, summarising the same tracker through 10 February 2026, notes that "tariffs have raised retail prices of imported goods on average by 6.8 percentage points, and for domestic goods by 4.8 percentage points." Switching to the US-made version recovered maybe a third of the increase.

What this looks like on one product

Take a $20 import cost, a 25 percent tariff, and a $40 shelf price. The duty is $5 per unit either way.

At 43 percent passthrough the price goes up $2.15, to $42.15, which is 5.4 percent more than you paid before. At 100 percent it goes up the full $5, to $45.00, or 12.5 percent more.

That $2.85 spread is the entire research argument, expressed as money on one item. It is also why a single confident number is worse than a range: anyone telling you a 25 percent tariff means a 25 percent price rise is out by at least a factor of two, and anyone telling you it means nothing at all is wrong in the other direction.

For what the 0.76 percentage points of extra CPI did to your money over the same stretch, our inflation calculator works on the published index rather than the tariff component.

The rate itself keeps moving

One thing worth checking before you trust any of this: the rate you type in.

Cavallo's sample paid an average applied tariff of 23.8 percent against a statutory average of 27.7 percent, because exemptions, delayed starts and carve-outs mean firms rarely pay the headline number. The applied rate is the one that drives prices.

The legal ground has shifted too. On 20 February 2026 the Supreme Court held 6 to 3 that the International Emergency Economic Powers Act does not authorise tariffs, striking down the reciprocal and trafficking-related duties, as WilmerHale summarised at the time. Section 232 and Section 301 duties survived, and a temporary Section 122 surcharge was imposed days later. Refunds of the invalidated duties are not automatic: Baker Tilly's walkthrough of the process describes administrative routes through Customs alongside filings before the Court of International Trade, and warns that the standard "is not just about filing."

So look up the current applied rate for your product's code and origin rather than reusing a figure from a headline. The passthrough evidence above holds whatever the rate turns out to be, since it is measured as a share.

The short version

Foreign sellers absorbed almost none of the 2025 tariffs. About a quarter of the tariff rate reached retail prices, which two teams agree on. Whether that quarter represents 43 percent of the tariff dollars or all of them is genuinely unsettled, and the answer depends heavily on how long the tariff has been in force.

Set the slider to 45 for a tariff a few months old, and 100 for one that has been in place a year. If you need the range rather than a point estimate, run it at both and treat the two shelf prices as the bracket, because that is what the published evidence actually supports.