Updated August 7, 2025 at 10:51 AM PDT
President Trump's tariffs on foreign goods officially kicked in on Thursday after months of delays.
They set the highest import levy since the 1930s, raising the tax on goods from Europe and Japan to 15%, and the one on Vietnam and Bangladesh to 20%, among other actions. Any goods that originate in China face additional penalties, while direct tariffs on Chinese imports are still in flux.
For many Americans, the question that's top of mind is: How will the tariffs change store prices?
Manufacturers and retailers have long warned that tariffs would cost regular shoppers dearly. But that hasn't happened, and the full blow has yet to land.
Here's what's going on.
Companies got time to stockpile goods to avoid paying more
Given Trump's longtime campaign in favor of tariffs, some retailers and wholesalers began stockpiling goods as early as last winter in hopes of avoiding any new import taxes for a while.
When Trump in April did announce tariffs on nearly all U.S. imports, Chinese goods faced a levy as high as 145%. But the stock market plummeted on the news and shipments almost ground to a halt, so Trump lowered that rate to around 30%. In fact, for most countries, much of the tariff plan has been on pause all summer.
The delays gave sellers time to stock up. Best Buy rushed electronics from Asia. American Fireworks Company in Hudson, Ohio, stocked up on fireworks for the Fourth of July, almost all of which are made in China. Pet-gear seller Barton O'Brien from Kent Island, Md., borrowed money to get as many harnesses, collars and other supplies from China as he could store.
"We had dog life jackets in the bathroom," O'Brien, whose company BAYDOG sells at hundreds of stores, told NPR in May. "Our warehouse was bursting. We had to rent a container and put it out back."
So many importers rushed their shipments that wintertime ports looked more like peak season — as if another Black Friday and Christmas were on deck — than the typical post-holiday lull.
"A lot of the things that consumers have bought so far is from that first surge," said Zac Rogers, supply chain management expert at Colorado State University who tracks shipping and warehousing data. "All that stuff came in pre-tariffs, which is one of the reasons why we haven't had the really high costs yet."
Many companies are eating new costs, for now
Trump has argued that foreign nations would pay his tariffs, but in practice it's American importers who suddenly faced new charges at customs. Those distributors, wholesalers and retailers have been hesitant to pass on the full cost to inflation-weary shoppers.
"I think we raised [prices] about 10% and absorbed the rest," Bobby Djavaheri, whose Los Angeles-based company Yedi Houseware imports air fryers and waffle irons from China, said in July. "It's simply impossible to pass on all of it because folks aren't going to buy the product."
This week, alcoholic-beverage giant Diageo — whose brands include Guinness, Johnnie Walker and Don Julio — said its tariff costs could reach $200 million a year, but it would absorb about half before raising prices.
General Motors in July said tariffs already cost the carmaker about $1.1 billion in the previous quarter, but it largely absorbed that expense as a hit to profits. Stellantis — maker of Chrysler, Jeep, Dodge and Ram — said it paid over $300 million in tariffs and built fewer vehicles overall to avoid paying even more. Industry data shows car prices this summer increased less than usual.
Tariff delays mean price delays — not necessarily price breaks
U.S. firms were shocked when the Trump administration slapped steep tariffs not only on China — for which they'd prepared — but also all major trading partners. Many importers responded by canceling shipments or holding them abroad until the tariff plan becomes clear.
And that means those costlier imports are simply not here yet.
French-wine importer Patrick Allen from Columbus, Ohio, told NPR in June that his customers were "sitting on their hands" instead of placing their usual orders for the fall and winter holidays. Pet-supplies retailer O'Brien canceled his order of doggie sweaters from India. Hair barrette seller Rozalynn Goodwin from Columbia, S.C., halted her shipments from China.
Now, new import shipments begin facing higher tariffs. Plus, companies still stockpiling are starting to face higher warehousing costs, says Rogers. In June, his data showed demand for storage space outpaced supply for the first time since the supply-chain crunch of 2022.
That means soon, manufacturers and retailers will have to decide how much to keep shipping — and how much of the new costs they're willing to keep eating. That has economists still forecasting higher prices, even if slower or lower than originally feared.
Economists at the Yale Budget Lab forecast that the higher tariffs will eventually cost U.S. consumers about $2,400 per household this year.
Retailers slow-roll price hikes and hope tariffs blow over
Last week, consumer giant Procter & Gamble said it plans to raise prices on about a quarter of its products by an average of 2.5% in the coming months. The company said shoppers might not respond with alarm, because that rate is close to regular inflation. But under the surface, it'll be an example of tariffs being passed on to consumers.
Federal data next week is expected to show how prices moved in July. As of June, inflation was heating up slightly, up by 2.7% from a year ago, with prices increasing a bit faster in categories especially affected by tariffs: clothes, appliances and toys.
Toymaker Hasbro in July pushed back its expected hit from tariffs, saying they would bite later in the year and likely with less damage than originally feared, thanks to stockpiles and delays. Finance chief Gina Goetter said tariff-related expenses have so far been offset by cost-cutting, budget-reshuffling, shifting suppliers and "targeted" price increases.
Many business owners hope Trump's original plans — for Chinese tariffs as high as 145%, for example — never come to pass.
"That would have put people out of business in a hurry, quite honestly," said Danny Reynolds, who runs Stephenson's clothing boutique in Elkhart, Ind., speaking to NPR in June. "So I feel like that was always just kind of a threat that was dangled out there by the president to begin negotiations."
He was counting on tariffs to stay lower, around 30% on Chinese goods, with costs getting divvied up among manufacturers, wholesalers, retailers and shoppers.
"If you take 30% and cut that into five or six," Reynolds said, "now suddenly it's not quite as dramatic."
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