By Meaghan Tomasiewicz
@redlineproject
Tariffs have been a hot topic since the Trump Administration announced reciprocal tariffs on April 2. While lauded by some, others have expressed concerns about the potential repercussions of these taxes on inflation rates.
Inflation rates are typically calculated using the Consumer Price Index (CPI). The CPI, calculated by the Bureau of Labor Statistics (BLS) tracks changes in the average prices for a set of goods and services, which encompasses everyday costs such as groceries and gasoline. This set of goods is typically referred to as a “basket of goods,” which, together, reflects a household’s patterns of consumption.
Overall, the CPI rose only 0.1% in May 2025 compared to April 2025. This change does not indicate significant inflation in the U.S. This does not mean every good and service has increased 0.1%. Consider the chart below, which demonstrates how the price of eggs has continued to fall since March 2025. Milk and tomatoes have also fallen slightly, while electricity, utility gas and gasoline have remained relatively stagnant over the past year. Ground beef has continued to increase steadily over the past year, prompting some discussion on the topic.
When specific items increase in price, they tend to attract media attention. The significant rise in egg prices from October 2024 to March 2025 received extensive coverage, and in recent weeks, beef prices have also been a topic of discussion. These individual indicators may not be the most accurate indicators of overall changes in purchasing power.
Recent media coverage has indicated that tariffs have not raised prices — yet. Skeptics have pointed out various factors that have kept inflation down so far. According to CNBC coverage, companies hoarded imported goods prior to the April 2 reciprocal tariff announcement. Moreover, it takes time for the impact to be observed in the economy, and companies may struggle to adjust prices significantly due to decreased consumer spending in response to fears of ongoing inflation.
Many experts predict that rising tariffs will eventually have a significant impact on inflation and, consequently, on individual consumer purchasing power.