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Here’s a plain-English report on what the new tariffs mean for goods prices—with the services part of the CPI stripped out so we can focus on the things you actually buy and take home.
Why We’re Looking at “Goods Only”
When inflation is reported in the news, it usually covers the entire Consumer Price Index (CPI). But most of that—about 70%—is services like rent, medical visits, insurance, and tuition.
Since tariffs mainly target physical goods, looking at “goods only” CPI tells a clearer story of where you’ll actually feel the changes.
What’s Being Tariffed
The 2025 tariff package imposes big increases—up to 50%—on certain imported products, especially:
- Clothing & shoes (apparel)
- Electronics & appliances
- Household furnishings
- Cars and auto parts
- Some food items (especially fresh produce)
- Various consumer goods from targeted countries
Not everything you buy falls into these categories, and some things are made domestically or imported from countries not hit with tariffs. That’s why the overall effect is much smaller than the “50%” headline suggests.
How Much of the CPI Is Goods?
Here’s the breakdown from official government inflation data (June 2025):
- Food at home (groceries): ~26% of the goods basket
- Energy commodities (gasoline, heating oil): ~10%
- Clothing: ~8%
- New cars: ~14%
- Used cars: ~8%
- Medical goods (prescription drugs, equipment): ~5%
- Alcohol & tobacco: ~4%
- Other goods (furniture, appliances, electronics, recreational goods, school supplies, etc.): ~24%
Goods altogether make up about 30.5% of the total CPI.
Expected Price Jumps in Goods
Based on studies from Yale, Goldman Sachs, and the Boston Fed, the short-term full price increases from tariffs—if 100% passed through—look roughly like this:
| Category | Expected Price Jump |
|---|---|
| Clothing | +17% |
| New vehicles | +8.4% |
| Used cars | +3% |
| Electronics/appliances/furnishings | +8% |
| Groceries overall | +2.8% (fresh produce could be higher) |
| Alcohol | +5% |
| Medical goods | +2% |
| Gasoline/heating oil | 0% (not tariffed) |
| Tobacco | 0% |
Scenarios: How Much Will It Add to Goods Inflation?
Because businesses don’t pass the entire tariff cost to you right away, economists model different “pass-through” rates.
1. If businesses pass on only 50% of the cost
- Goods-only inflation rise: ~+2.85 percentage points
- For example: If goods prices were going to rise 1% this year, they’d now rise about 3.85% instead.
2. If they pass on about two-thirds (67%) – the Goldman Sachs year-end forecast
- Goods-only inflation rise: ~+3.82 percentage points
- That’s close to what economists expect as inventories run out and supply chains adjust.
3. If they pass on 100% (full exposure)
- Goods-only inflation rise: ~+5.7 percentage points
- This is the upper bound if there’s no cushioning from retailers or foreign suppliers.
What This Means in Real Life
- Clothing & footwear will see some of the largest jumps, especially in imported items. A $50 pair of jeans could become $58–$60 in the baseline scenario.
- Electronics & appliances will feel it next—especially those heavily imported from tariffed countries. That $1,000 fridge might run $1,080 by year-end.
- New cars could cost hundreds more, particularly if they use imported parts subject to tariffs.
- Groceries will see smaller but noticeable bumps, especially in fresh fruits and vegetables not grown domestically year-round.
- Gasoline prices shouldn’t move directly from tariffs, but could still swing from other market factors.
Why the Overall CPI Looks Smaller
If you hear in the news that tariffs are only adding “0.1%” to CPI right now, it’s because:
- CPI includes services, which make up most of household spending and aren’t affected by tariffs.
- The effect takes months to flow through as old inventory sells and new tariffed imports arrive.
- Businesses sometimes absorb costs or find new suppliers.
But if you focus on goods only, the inflation boost is several full percentage points, and you’ll feel it in store aisles, showrooms, and online carts.
The Takeaway
Even though “50% tariffs” don’t mean prices jump 50%, they will make imported goods meaningfully more expensive, especially in categories where imports dominate.
For many households, that means higher bills for clothes, home goods, electronics, and cars—and these increases are likely to stick around as long as the tariffs do.
If you want, I can put this into a consumer-facing chart pack showing each goods category, the expected price bump, and what that means in dollars for common purchases. That would make the impact crystal clear.
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