Tariffs not causing inflation, Council of Economic Advisors concludes

The Council of Economic Advisors this week released a report that found prices on imported goods had fallen despite the implementation of tariffs on many nations.

"[A]fter decomposing the Personal Consumption Expenditure Price Index into imported and domestic components, found that the prices of imported goods have not only fallen this year, but also declined faster than overall goods prices since February," they wrote. "These findings contradict claims that tariffs or tariff-fears would lead to an acceleration of inflation."

"Similar analysis for the widely used Consumer Price Index (CPI) shows that imported goods have deflated 0.8 percent while overall goods prices have remained constant," the report went on.

Notably, the report did not include a hypothetical projection in which tariffs did not take effect, but asserted that "[t]his analysis suggests that tariffs have not reduced the disinflationary impulse from imported goods as of May."

The report comes as the administration continues to work toward securing trade deals with other nations in the wake of Trump's "Liberation Day" tariffs. Trump recently unveiled a trade deal with Vietnam after concluding one with the United Kingdom.