Summary
A study found that during a period of high U.S.-China trade tensions, retailers increased prices more than necessary based on import taxes alone. Researchers noted that companies used the trade war announcements as an opportunity to raise prices, even when those goods were not directly affected by tariffs. The findings highlight the broader impact on consumers during trade disputes.
Key Facts
- Researchers studied price changes in 1,900 consumer products across 19 categories.
- Price increases during April and May were linked to trade tensions between the U.S. and China.
- Retail prices increased significantly before tariffed goods reached stores.
- Average price increases during this period were 1.8% every two weeks, sometimes exceeding 2%.
- Nearly 43% of the products saw price hikes attributed to retail strategies.
- The study found that retailers used "trade war" announcements as an excuse for margin expansion.
- Findings matched a Fed Beige Book report and New York Federal Reserve survey noting similar pricing behaviors.
