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Economy

How Trump’s Tariffs Are Still Driving Up Prices: CFOs Reveal the Hidden Costs

Tariffs drive U.S. price hikes, CFOs say, potentially lowering inflation. Businesses plan to pass costs to consumers.

byEditorial Staff

September 24, 2025, 10:55 AM

Executive Summary

Tariffs are significantly driving price increases, with CFOs estimating they account for about one-third of current price growth, suggesting inflation could be substantially lower without President Donald Trump’s trade policies.

CFOs project tariffs will continue to cause price hikes into next year and potentially longer, impacting business costs, consumer prices across various sectors, and leading nearly a quarter of businesses to reduce spending.

Tariffs and trade policy remain the top concern for CFOs for the third consecutive quarter, leading to a more pessimistic economic outlook among those affected and forcing businesses to dedicate resources to tracking and passing on these costs.

The Story So Far

The current economic discussions around inflation and rising prices are largely contextualized by President Donald Trump’s aggressive trade policies, specifically the tariffs imposed on imported goods and raw materials, which businesses report are significantly increasing their costs. These findings directly challenge President Donald Trump’s assertions that his trade strategy is not driving price hikes and that there is “no inflation,” as companies are passing these increased costs onto consumers.

Why This Matters

Tariffs implemented under President Donald Trump’s administration are significantly contributing to U.S. inflation, with CFOs attributing approximately one-third of current price growth to these trade policies and expecting their impact to persist into 2027. This directly translates to higher import costs for businesses, which are largely passed on to consumers through increased prices on various goods, and remains a top concern for businesses, influencing their spending decisions and overall economic outlook.

Who Thinks What?

Chief Financial Officers (CFOs), as indicated by The CFO Survey, believe tariffs are significantly contributing to price increases across the U.S. economy, estimating they account for approximately one-third of their companies’ price growth this year and expecting them to be a prolonged issue.

President Donald Trump asserts that there is “no inflation” and that his aggressive trade strategy is not driving price hikes.

Stephen Miran, a new Fed Governor and White House economist, argues that concerns about tariff-induced price hikes are “overstated,” suggesting that exporting nations would likely lower their selling prices to absorb tariff costs.

A recent survey of chief financial officers indicates that tariffs are significantly contributing to price increases across the U.S. economy, suggesting that inflation could be approximately one-third lower without President Donald Trump’s trade policies. The findings, released Wednesday, challenge President Trump’s assertions that there is “no inflation” and that his aggressive trade strategy is not driving price hikes.

Tariffs’ Persistent Impact on Prices

CFOs estimate that tariffs are responsible for about one-third of their companies’ price growth this year. Furthermore, the survey suggests that tariffs are not merely a one-time adjustment, with CFOs projecting they will account for approximately a quarter of price increases next year.

John Graham, a finance professor at Duke’s Fuqua School of Business and director of The CFO Survey, noted that tariff-driven price hikes are expected to be a prolonged issue, potentially extending into 2027. Nearly a quarter of surveyed businesses also reported plans to reduce spending this year due to tariffs.

Business Costs and Consumer Prices

Tariffs are increasing the cost for businesses to import goods, components, and raw materials. On average, CFOs anticipate their costs will rise by 4.4% this year, with 1.7 percentage points attributed to tariffs. Businesses plan to pass a substantial portion of these higher costs to consumers.

Major companies, including Walmart, Target, Hasbro, Nike, Mattel, Stanley Black & Decker, and Procter & Gamble, have announced price increases on certain items due to tariffs. The CFO survey found that overall price increases this year are expected to reach 3.9%, with tariffs accounting for 1.3 percentage points of that figure.

Federal Reserve Chair Jerome Powell recently commented that while the “pass-through” of tariffs into prices has been “slower and smaller than we thought,” it is likely ongoing. Powell indicated that the Fed expects inflation to continue rising, though potentially not as high as initially anticipated. He also observed a reversal in the long-standing trend of declining goods prices, attributing it to tariffs.

Specific Sector Impacts

Certain goods and services exposed to tariffs, such as jewelry and car repairs, have experienced rapid price increases. For example, coffee prices spiked by 4% between July and August, the largest monthly increase in 14 years, following the imposition of 50% tariffs on imports from Brazil. Coffee was nearly 21% more expensive compared to the same month last year, marking the largest annual jump since 1997. Similarly, tomato prices climbed by 4% in August, the most since the pandemic, as most tomatoes imported from Mexico face 17% tariffs.

Differing Views on Tariff Impact

Stephen Miran, a new Fed Governor and White House economist, has argued that concerns about tariff-induced price hikes are overstated. Miran, a staunch ally of President Trump, stated that “relatively small changes in some goods prices have led to what I view as unreasonable levels of concern.”

Miran suggested that exporting nations would likely lower their selling prices to absorb tariff costs, which would theoretically lead to falling U.S. import prices. However, import prices unexpectedly increased by 0.3% in August, with nonfuel import prices seeing their largest jump since April 2024. Powell affirmed that “the tariffs are not, mostly not, being paid by exporters.”

Economic Outlook and CFO Concerns

Despite the tariff concerns, the outlook for the U.S. economy among CFOs has improved since the second quarter, partly due to easing uncertainty. There was also a modest dip in expectations for cost and price increases this year, which The CFO Survey suggests might indicate some businesses have yet to experience the “extreme impacts” they anticipated, or that these impacts are now expected in 2026.

However, tariffs and trade policy remain the top concern for CFOs for the third consecutive quarter. CFOs who identified tariffs as a primary worry expressed a “notably more downbeat” view of the economy and their own firms. One unnamed CFO noted their business dedicates significant resources to identifying, tracking, and charging customers for tariffs, equating to two to three full-time employees, which necessitates higher prices for customers. Another CFO highlighted challenges in setting annual prices while product costs, influenced by tariffs on goods from Canada, Mexico, and China, fluctuate significantly.