Tariffs Leave Consumers and Companies Splitting the Tab

How hard did a year of major tariff announcements, trade negotiations, and rollbacks hit US consumers? Prices surged at first, but then stabilized—until the war with Iran began.

US consumers absorbed up to 43% of the tariff burden after the first seven months of the new tariffs, with the remaining portion borne by US companies, according to estimates by the Harvard Business School Pricing Lab Tariff Tracker. While retail prices rose quickly following each levy announcement in 2025, they gradually leveled off through February 27, the latest data available in the tracker.

“Most of the pass-through has likely already occurred, assuming tariffs do not increase further,” explains Alberto Cavallo, the Thomas S. Murphy Professor of Business Administration at HBS and founder of the Pricing Lab. “This stability may be due to the rollback of certain tariffs by the US government and the increasing likelihood of the Supreme Court ruling against them.”

Cavallo’s team plans to continue its price analysis to gauge the impact of the conflict in Iran, which began February 28 and immediately roiled markets and trade. Inflation, as measured by the Consumer Price Index, jumped to 3.3% in the year through March from 2.4% in February. In the meantime, here’s an updated look at prices during the past year, capturing product shifts and “cheapflation.”

Cavallo and his team at the HBS Pricing Lab have been tracking tariffs’ short-term impact on prices for the past year. They developed indexes using daily prices from five major US retailers, matched with country-of-origin and tariff information for nearly 360,000 products.

Last April, Cavallo released their initial findings in the working paper “Tracking the Short-Run Price Impact of US Tariffs,” coauthored with HBS research assistants Paola Llamas and Franco Vazquez, both from the Universidad de San Andrés in Buenos Aires. They’ve updated their research with data up to February 27, 2026, right before the Iran war.